- SEC Crowdfunding Rules
- Judgment creditors
- Municipal Liability
- Consumer Debts
- Employment Law
- Small Business
- Equity Development
- Business Entities
- Sales and Dissolutions
- Mergers and Acquisitions
- Business Formation and Planning
- Closely Held Businesses
- Corporate and Business Tax
I'm an Executor or Administrator of an Estate...Now What?
As an estate planning attorney, I often receive calls from individuals who have just been designated as a personal representative and are wondering what they are legally required to do. Personal representatives may either be named an Executor (Executrix if the individual is female) or an Administrator (Administratrix if female). An Executor is the person whom a decedent named in his or her Will to be in charge of the administration of his or her estate. An Administrator is the person appointed by the court to be in charge of the estate when someone dies without a Last Will and Testament.
Both the Executor and Administrator are subject to the jurisdiction of the probate court. Both are fiduciaries, meaning that they have been given (or charged with) the highest duty of trust and responsibility that can be imposed by law. A personal representative has clear duties while carrying out the administration of an estate, including but not limited to the following:
· Inventorying estate assets;
· Paying valid debts and liabilities of the decedent as appropriate, and at the appropriate time;
· Distributing assets lawfully;
· Filing necessary paperwork in the probate action;
· Providing necessary notices to beneficiaries and other interested parties;
· Undertaking to defend interests of the estate in the event litigation is filed against the estate;
· Maintaining certain estate assets so as not to diminish their value; and,
· Filing necessary tax documents.
It is important to note that Executors do not receive their full authority until the Will is admitted to record, the Executor files a bond and takes an oath in the court in which the record is made. Thus, while people may know ahead of time that they have been named in the Will as an Executor, they cannot immediately begin inventorying or distributing assets; the correct court procedure must be followed. Additionally, if someone who has been named as an Executor does not wish to fulfill the role, he may refuse. In that instance, the alternate Executor becomes responsible for the ensuing duties; in the event no alternate is named, the court will appoint an Administrator.
Inevitably, I am also often asked by personal representatives what they get in return for serving as a personal representative. In Kentucky, Executors and Administrators are entitled to payment for their services on behalf of the estate. State law limits the compensation to five percent (5%) of the value of the deceased's total estate and five percent (5%) of the amount of the total income the Executor or Administrator collected for the estate (such as through the selling of real estate). If the personal representative proves he performed services for the estate that are above and beyond what is normally required, he may be awarded additional money by the court.
Serving as a personal representative is not a matter to be taken lightly. If you are designated as one, consider contacting an estate planning attorney. I have met with personal representatives for a one-time consultation to give an overview of responsibilities and also worked more closely with some to navigate the full probate process. Whatever your needs, the attorneys at McBrayer are happy to assist you with this unique role.