Personal Representative

What Is a Personal Representative?

A personal representative or legal personal representative is the executor or administrator for the estate of a deceased person. Personal representatives serve as fiduciaries of the beneficiaries of estates and have the duty to act in good faith, with honesty, loyalty, and candor, and in the best interests of the estate’s beneficiaries. The law requires personal representatives to follow the terms of the deceased person’s will (assuming that the individual who died had a will). If the deceased person died intestate, the personal representative will serve as the administrator of the intestate estate.

A personal representative is also an individual with the authority to make decisions over others. For example, the person authorized to make health-care-related decisions for another person because the latter is very ill or not lucid is a personal representative. In this case, a personal representative has power of attorney, a legal document that allows the representative to act for the other person when making legal or financial decisions.

How a Personal Representative Works

A personal representative typically performs a number of tasks when acting as the executor of a deceased person's estate, including arranging funeral services, notifying those who are entitled to part of the estate’s property, and determining the value of the estate, minus any debts. A personal representative usually arranges for the management and security of estate property, handles payments of all debts and expenses owed by both the deceased and the estate, and assesses income-tax and estate-tax liabilities. Lastly, a personal representative files all needed tax returns on time and distributes estate property according to the will.

In most cases, a personal representative generally is a close relative or friend of the deceased. Given the significant amount of work involved, a personal representative often receives compensation from the estate. Not all work must be performed by the personal representative, though. For example, the personal representative usually works closely with lawyers and tax professionals. The personal representative merely ensures that all the tasks related to the estate are handled properly and in a timely manner.

Requirements of a Personal Representative

A personal representative usually is named in a will. However, courts sometimes appoint a personal representative. Usually, whether or not the deceased left a will, the probate court will issue a finding of fact that a will has or has not been filed and a personal representative or administrator has been appointed. The personal representative will use this document, along with the death certificate, to settle the deceased’s affairs and dispose of his or her estate.

Being a personal representative requires a flurry of work in a short amount of time. Sometimes, it’s frustrating, especially if beneficiaries squabble about the estate or contest the will. Also, a personal representative typically is personally liable for any claims of fraud or mismanagement by the beneficiaries.

There are certain criteria that personal representatives must meet in order to serve in this role. Minors can't serve as personal representatives, and convicted felons typically can't serve as personal representatives, either. Banks or trust companies that don't have fiduciary powers in the state where probate is taking place are also barred from serving as personal representatives.

Of course, there’s hired help to make the job easier, such as estate lawyers. Another option is online tools. Some offer guidance about what to do next, allow documents to be shared with beneficiaries electronically, and set a timeline for all the steps throughout the entire process.

Personal Representative vs. Trustee

A trustee is a legal title that is granted through a trust, which is an agreement between two consenting parties. Both personal representatives and trustees are types of fiduciaries, with a responsibility to act in the best interests of an estate and its beneficiaries. However, each of these designations plays a very different role in an estate plan. The primary difference between a personal representative and a trustee: One handles your probate estate while the other deals with living trusts.

Any individual who creates a living trust must name a trustee. The trustee is tasked with oversees the day-to-day management of property owned by the trust for the benefit of its beneficiaries. Trustees are trusted to make decisions in the beneficiary's best interests; they have a fiduciary responsibility to act in the best interests of the trust beneficiaries when managing their assets.

Both personal representatives and trustees can be a person, an institution, or both may serve as co-trustees. 

Advantages and Disadvantages of a Personal Representative

There are many responsibilities allocated to a personal representative. For this reason, there are both advantages and disadvantages to accepting this role. While many people feel honored to be asked to accept the role of a personal representative, executing a will takes a lot of time and work. One of the biggest drawbacks to being an executor is the great amount of time it takes to properly handle the responsibilities. 

An executor is tasked with dispersing all parts of an estate. This can include property, possessions, and assets. If an estate is very large, or if there are unequal distributions to children, trusts, or annuities to untangle, the task can be very fraught and time-consuming. There can be disputes with co-executors and disputes among heirs.

Executors must be organized and detail-oriented, and they must be willing to dedicate a significant amount of time to this role. It may be better to decline the role of a personal representative, even if you feel honored to be selected as an executor, if you feel like you are unable to do the job properly. A sense of obligation forces many people to accept the role of executor, although it is a bigger decision than most people realize. 

Of course, a personal representative is allowed to receive a commission for carrying out their duties. Different states have different laws about how executors are compensated: It can be by the hour, as a flat fee, or as a percentage of the estate. Executors are also entitled to compensation for expenses incurred as they carry out their responsibilities. However, if the estate is very small, the executor may be asked to waive any commission.

Pros of Being a Personal Representative

Cons of Being a Personal Representative

Personal Representative FAQs

What Is a Personal Representative Deed?

When someone dies owning an interest in real estate, the legal instrument used to transfer the property is a personal representative deed. Personal representative deeds provide essential information about the specific probate estate and related property transfer in one document.

How Long Does a Personal Representative Have to Settle an Estate?

Because every estate is different, the timeline it takes to settle an estate varies. If an estate has only a few, easy-to-find assets, it may be all wrapped up in six to eight months, whereas a more complicated estate may take several years to fully settle. Depending on the state, there may be deadlines for certain parts of the process. As a result, the estate’s executor may strive to complete certain steps by a given date. 

What Does a Personal Representative Get Paid?

A personal representative is typically entitled to be paid for their services. The will of the decedent generally outlines how much the personal representative should be paid.

Some individuals may choose to limit the fees to a specific dollar amount while others may choose to provide the payment of reasonable fees based upon state law. An additional option is to leave their personal representative a specific bequest instead of authorizing them to collect a fee. While fees are taxable, a bequest is nontaxable.

Can You Petition to Become a Personal Representative?

If you fail to leave a will, the court will appoint someone to handle your final affairs. Some state courts require that

If a personal representative has been named in a will, and then feels unable to handle the time-consuming challenge of settling the estate, some states require that they must petition the court for removal so someone else can take over.

Beneficiaries of a will also have a right to contest a will and object to the personal representative the decedent named in the will. This usually results in a trial, where a judge will make the ultimate decision as to who will serve as personal representative — either the personal representative named in the will or another party nominated by the beneficiaries. 

What Legal Actions Can Be Taken Against a Personal Representative?

An interested person can petition the court to remove the personal representative, or request supervised administration. The petitioner can also petition the court for a temporary restraining order to stop the personal representative from doing a certain act.