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July 10, 2006: Personal Representative Responsibilities

Q: A friend just asked me to act as her personal representative. If I accept, what will I be getting into?

A: A personal representative is a fiduciary, someone placed in a legal position to take care of matters for another. The personal representative (also called an executor or an administrator in other states) basically wraps up the legal affairs of the deceased and then disburses the deceasedŐs assets by following the directions of the deceased (as set out in the Will) or the distribution established by Colorado (in the intestate laws if there is no Will).

Thus, all assets that need to be handled are identified and administered. Be sure that your friend makes a list of assets and matters that need to be handled. For assets held in joint tenancy or with designated beneficiaries (also called "payable on death"), the personal representative must fill out and submit the appropriate documents. For assets that are in the deceasedŐs name, or held in tenants-in-common, or proceeds payable to the estate, a probate through the Courts will be required for any real estate, or for other non-real estate assets that total more than $50,000. Be sure to use unsupervised administration and decide if an attorney is really needed or if you feel comfortable doing the probate yourself.

The deceasedŐs bills will be paid during the settlement proceedings, along with the filing of any required estate and personal income tax returns or estate/inheritance tax returns. Also if a proceeding is started, any court required steps will need to be comply with things such as filing inventories, publishing notice to creditors, etc.

The personal representative is not only a fiduciary representing the interests of the deceased but also represents the estate beneficiaries. Although definitely in charge, personal representatives are not dictators. Documents and information must be shared with the appropriate beneficiaries and heirs as provided by statute. Duties must be timely done. And the activities of the personal representative are for the benefit of the estate beneficiaries, not for the personal representative.

A personal representative is held accountable for his or her actions. He/she can be financially liable for losses suffered by the estate. A personal representative can also be prosecuted for any violation of the criminal law. A personal representative under certain circumstances would be personally liable to pay from his or her own funds estate bills or expenses. And a personal representative can be removed by the Court. Finally, a few have been sued years later by beneficiaries (such as minors at the time that the estate was settled) who have had their legal rights violated.

But do not start "freaking out" as the kids now-a-days say. As long as you act in a reasonable manner, take care of the details, and hire help in areas where your expertise might be lacking (such as accounting and legal), you will do fine. Remember, you are being picked because someone has confidence in your judgment and skills. And you have the right to receive "reasonable" compensation for your services.

Finally, remember that a personal representative only has authority after death. If your friend wants you also to be able to make decisions while he or she is alive, including medical decisions, then a comprehensive Durable Power of Attorney needs to be signed naming you as the agent. The overall standards of care and accountability of the agent will be very similar to those mentioned above for a personal representative because an agent is also a fiduciary.

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