Obligations Of A Personal Representative
In most cases, the personal representative has discretion in how to handle the estate assets and the affairs of the estate. If there is a will, the intentions of the testator as expressed in the will should always be considered as well as the desires of the estate beneficiaries – when practical. For the sake of family harmony, a personal representative should be fair in the administration of the estate.
"The personal representative has discretion in how to handle the estate property"
The personal representative should not act until the estate they appointed by the court as the personal representative. The personal representative should, however, maintain real estate or continue to operate a business.
If the personal representative is also a beneficiary under the will or an heir according to law if there is no will (e.g., an adult child), he or she is absolutely forbidden to “self-deal” or give anyone preferential treatment. Note that – absent his or her own negligence or wrongdoing – the individual serving as personal representative is not personally responsible for satisfying claims or lawsuits against the decedent or the estate itself.
The personal representative is responsible for prudently investing estate assets. The law imposes a fiduciary duty on personal representatives to act cautiously and always to have the best interests of the beneficiaries in mind. If this duty is violated and a loss or waste of assets results, the personal representative might be ordered to pay compensation personally (or as an institution) to the beneficiaries in this situation, as well.
However, the personal representative is not held responsible for a poor return on estate investments as long as any investments chosen by him or her are appropriate. For example, if a general market downturn decreases the value of the estate portfolio of “blue chip” stocks and bonds, the law would not hold the personal representative responsible. By contrast, if the personal representative lost money risky speculative investments or failed to get a reasonable return by leaving substantial assets in a checking account, these would probably be considered inappropriate, and he or she might be individually liable.
The personal representative’s fiduciary duty also requires him or her to protect and preserve estate assets. For example, if estate funds were available but the personal representative neglected to pay an insurance bill and a fire loss to the decedent’s home resulted, he might well be held liable to the beneficiaries.
The personal representative has a fiduciary duty to protect and preserve the estate assets.
A personal representative is entitled to reasonable compensation. The fee taken is must be listed on the final account and is, therefore, it is ultimately subject to approval by the court. Our fees, accountant’s fees as well as any other professional fees will typically be paid or reimbursed out of the assets of the estate.