A personal representative is one kind of fiduciary
A personal representative is an individual whom another has trusted
to manage her property and money. When a person dies, a personal representative
generally is required to settle the decedent's financial affairs. In some instances,
a living person may need a personal representative; for example, a minor might need
a personal representative to make legal decisions for her. Personal representatives
can be appointed by a court, nominated by will, or selected by the person involved.
Their duties are performed under the supervision of probate courts, which are governed
by state law.
When someone dies leaving property, a personal representative is required to administer
the decedent's estate, which involves resolving any debts and handling the distribution
of property. The jurisdiction, powers, and functions connected with administering
the decedent's estate are usually entrusted to special tribunals, known as probate,
surrogate, or ORPHANS' COURTS. These courts supervise the actions of the personal
representative.
The choice of a personal representative depends on whether the decedent left a will,
the legal document instructing how his estate is to be divided. If the will names
a personal representative, that person is called an executor (male or female) or
executrix (female). The court will accept the representative unless he does not
meet statutory qualifications. These qualifications vary from state to state but
largely concern such factors as age and conflict of interest. If there is no legally
valid will, the decedent is said to have died intestate. In such cases, the court
appoints a personal representative for the decedent's estate. The court-appointed
representative is called an administrator (male or female) or administratrix (female).
In special instances, courts appoint one of three types of administrators. They
are appointed when (1) an executor cannot or will not serve (administrator cum testamento
annexo); (2) a prior executor or administrator has not completed the estate (administrator
de bonis non); or (3) an interim administrator (special administrator), given restricted
powers over the estate, is needed until a proper legal representative can be found.
Once approved by the court, personal representatives receive official sanction to
fulfill their duties. Executors receive documents called letters testamentary—administrators
receive letters of administration—authorizing the representative to handle the legal
affairs of a decedent. Throughout the process of administering an estate, all personal
representatives serve as officers of the court. They derive their authority from
the court and thus serve at the court's pleasure. Their authority can be revoked
on various grounds, ranging from neglect to incompetence. Primarily, they must act
on behalf of all parties and all interests in the estate. They owe the beneficiaries
an absolute duty of loyalty, or fiduciary duty, to administer the estate in their
best interest.
In general, the personal representatives' duties are to settle and distribute the
estate. This complicated task may require the assistance of an attorney or a trust
company, so-called co executors. The personal representative's first task is to
collect and preserve the assets of the estate. The personal representative also
oversees the appraisal of the estate's assets, where necessary. The personal representative
must also pay the estate's creditors, as well as any Estate and Gift Taxes due under
federal law. Finally, the representative sees to the distribution of the remaining
estate among the decedent's beneficiaries. If there are no beneficiaries, the state
usually receives the property.