What Does A Personal Representative Do During Probate?
When your loved one dies with assets that must go through probate, a personal representative must be appointed to take charge of the estate. If the decedent left a will, the personal representative is usually known as the Executor and where there is no will, the personal representative is known as the Administrator. If you find yourself appointed as the personal representative of an estate, you have set duties you need to fulfill under California law.
Here are some of the responsibilities of a personal representative during probate.
Get a handle on assets and debts
A personal representative must marshal the assets of the estate and create an inventory. This includes listing all accounts the decedent owned at death, the decedent’s residence or other real property the decedent may have owned, motor vehicles, and many other things the decedent owned. These assets must be listed out and non-cash assets must be appraised by a court-appointed appraiser known as a probate referee.
You must also notify known and reasonably ascertainable creditors and pay off just debts. This is very important, because a personal representative can be held personally liable for failing to give notice in some cases. While you are not required to be a de facto private investigator, looking for all possible creditors, you must inform certain government agencies of the probate by law and you cannot ignore potential creditors of which you are aware. The general rule is: if you think the decedent might owe the person money, send them a notice.
Notify heirs and beneficiaries
If there is a will, the decedent may have left their property to any number of people. And if there is no will, California law has a set of rules determining the heirs of the estate. Those heirs, as set by law, must receive notice of the probate, even if they are not receiving anything from the will. The Probate Code also requires that a probate be published in a qualified newspaper before you can even be appointed as personal representative.
Taxes, taxes, taxes
A personal representative must make sure the decedent’s income taxes are completely paid up. This includes not only the taxes owed in the year of the decedent’s death, but any potential state or federal income taxes not completely settled from past years. If the decedent owned a home, the property taxes must be paid up and supplemental taxes will be assessed starting on the date of the decedent’s death. The personal representative may also need to make protective property tax-related filings for property going from a parent to their surviving children. If the estate itself earns income (e.g., from the sale of real property or stocks during the probate process), then the personal representative must also file an estate income tax return (IRS Form 1041 & CA Form 541), which is different from an estate tax return. In some cases where the estate is quite large or the decedent was not a United States Person, the estate may also have to file an estate tax return (IRS Form 706). Failure to properly manage the taxes could result in personal liability for the personal representative.
As a personal representative, you have many important responsibilities. An experienced probate lawyer can help you fulfill these responsibilities and avoid personal liability.
