The Personal Representative

The first step in estate administration is the appointment of a personal representative – the individual, company, or group of individuals that will handle the affairs of the estate.  Once appointed, the personal representative has a fiduciary relationship and duties to the estate and the powers necessary to carry out the estate administration.  The position of personal representative is a very important role and carries much responsibility.

Priority of Appointment:

When there is more than one person seeking appointment for the personal representative position, there is an order of priority that is used to select the appropriate person.  This order is applied the same in both formal and informal probate proceedings.  If the person is not otherwise disqualified, the order is as follows: (1) the person nominated by the decedent in his or her probated Will, (2) the surviving spouse who is also devisee under the Will, (3) other devisees under the Will, (4) the surviving spouse even if not a devisee, (5) other legal heirs of the decedent, and finally, if no one else fills the position within 45 days after death, any creditor may fill the position, or a public fiduciary may be appointed.  If there are multiple parties with the same level of priority seeking to fill the position, formal proceedings will be necessary to make the appointment.

Notice of Appointment:

Once the application to serve as personal representative has been approved, the appointed personal representative must provide proper legal notice by mail to all interested parties of the appointment, along with a copy of the probated Will, within 30 days of their appointment.  An objection can be made to the appointment only in formal probate proceedings.  Each heir that has received notice then has 4 months to contest probate.  If the personal representative fails to provide notice to any heir, the personal representative is personally liable for damages suffered by the heir caused by lack of notice.

Duties and Powers:

The office of personal representative carries with it fiduciary responsibilities equivalent to the standards of care and duties of accounting applicable to trustees.  In general, the personal representative has the duty to settle and distribute the estate in accordance with the terms of the probated Will and the Arizona state code, expeditiously and efficiently, consistent with the best interests of the estate.  All authority granted must be used only as in the best interests of the successors of the estate.  Some such duties include preparing and filing an inventory, taking possession of assets, making proper filings, and keeping appropriate parties apprised of progress.

The personal representative will have the same power over the property of the estate as would the absolute owner of the property.  However, this power is to be exercised only in trust, for the benefit of the creditors and others interested in the estate, but may be exercised by the sole action of the personal representative, without notice or court action.  The personal representative also has the same standing to sue as the decedent had at the time of his or her death, so long as the cause of action survived the decedent’s death.  The personal representative essentially steps into the shoes of the decedent and has the power to take any actions the decedent could have taken while alive.  Some such powers include performing contracts, receiving assets, selling or leasing assets, investing, purchasing insurance, paying creditors, distributing assets, and making repairs or improvements.

The personal representative may hire outside parties, such as appraisers, attorneys, or investment advisors, as necessary to assist them in carrying out their duties.

Compensation:

The personal representative is entitled to reasonable compensation for his or her services.  If there is a provision of the Will providing for inadequate compensation, the personal representative may renounce such consideration and instead be eligible to receive other reasonable compensation.  A personal representative may also renounce the right to compensation altogether.  If it is determined by the court that a person has received excessive compensation, the court may order an appropriate refund to the estate.

The personal representative is also entitled to make any necessary disbursements or pay fees and expenses from the funds of the estate if they are reasonably incurred in administration of the estate.

Termination of Appointment:

Termination of the appointment will end the rights and powers of the appointment.  The appointment will be terminated automatically in the case of death or disability of the serving personal representative or can be terminated voluntarily by resignation, or involuntary by removal.  To terminate by resignation, the personal representative can resign either one year after the closing statement has been filed, by a court order closing the estate or by filing a written statement with the registrar.  In any case, if the estate remains open and no successor petitions to fill the position, the termination will be effective.  A personal representative appointment can also be terminated by removal for cause if it can be shown to the court that it is in the best interest of the estate.  If the appointment is validly terminated in any manner, the personal representative is still not discharged from their liabilities and fiduciary duties to the estate.

 

Leave a Reply

Your email address will not be published. Required fields are marked *