An Asset Search Can Help Manage the Risks of Being a Personal Representative

When you learn that your relative has chosen you to be the personal representative or executor of the estate, your first reaction could be to feel honored. It is a positive thing that your relative has placed their trust in you. However, it is important to be aware of the risks associated with this significant role as it could expose you to liability.

The personal representative role is a job. You can be compensated for your time by the estate or there may be a bequest in the Will in return for doing the job. The estate may also compensate you for attorney’s fees. The role is taken very seriously, and you could be held liable for not doing your due diligence. You may have been named in a Will or the probate court appoints you as a fiduciary towards the beneficiaries of the estate. This means you have a legal duty towards the beneficiaries of an estate.

An attorney advising a personal representative during the probating of an estate needs to advise them of their responsibilities and liabilities. First, the duty of the personal representative is to exercise care towards the assets of the deceased and make sure they are passed on to the beneficiaries as instructed in the will. The level of care that you need to take may not be obvious until you are faced with the particulars of the job, but assets that are part of a complex or unknown estate could create various issues that could expose you to the risk of being removed as a personal representative or even more profound consequences. As the personal representative you will need to:

  • Know if the estate has any real estate, keep up with any property taxes and manage it so it is in a saleable condition
  • The personal representative needs to be aware of all income streams that are part of the estate because you will be required to pay taxes on the deceased’s income for the previous year.
  • Notify any creditors about the estate. If the estate has debts or tax liability and you pay the heirs before settling debts and tax, you could be personally liable for these payments.
  • Know about any investments or business interests. Managing the decedent’s affairs after their death if they have any investments, business interests or real estate can be tricky as you may need to seek approval from beneficiaries or get court approval before making decisions. You need to be conservative about managing the assets of the estate as the goal is to disburse the estate as instructed in the Will, so any decisions that could incur loss to the beneficiaries, such as selling investments at the wrong time, could make you liable to the heirs of the estate. 
  • Maintain any vehicles such as boats, planes and cars and pay taxes on them so these assets remain in good condition.
  • Do not delay and immediately take control of the assets in the estate so that you ensure the estate does not lose out because you did not take timely action.

It is especially important for the personal representative to know what assets and liabilities are in the estate in order to disburse them as instructed and as carefully as possible or pay vendors or the state. A quick asset search can help the personal representative get a grip on the assets and liabilities in the decedent’s estate.

 A nationwide asset search with Asset Search Plus, Inc., costs as little as $185 and can uncover real estate, business interests, trusts, bank accounts, any vehicles such as boats, planes and automobiles, professional licenses and more. It can also reveal any debts or liabilities. The attorney for the personal representative has an important duty to advise someone going through the probate process, who may never have assumed the vital role of financial fiduciary up to this point. In doing your due diligence to your client, an asset search is a critical step that allows the personal representative to take control of the estate’s assets and fulfill the responsibility of their role.