Headline: REPRESENT!!

Date: 3/4/2021

Body:   Nobody likes to think about death (or taxes) but they are both inevitable.  When you receive correspondence from the IRS, you always have the right to have somebody represent you.   Death is no different, in this respect.   You will want somebody  who knows your desires and your wishes, and appreciates your essence in life.  You want this person to ensure that your final wishes here on Earth are carried out as you would want them to be.   This is why you draft a Will, and you also select a personal representative.

What Is a Personal Representative?

A personal representative (a.k.a. executor or administrator) is the person who represents you in the disposition of your estate when you are deceased.  The Personal Representative has to act as a fiduciary, and act in the best interest of your beneficiaries.  They are responsible for a great many things including funeral arrangements, notifications of beneficiaries and conserving the estate property for the beneficiaries, until distribution.  They also have to file the tax returns for the Estate.  Given this rather onerous list of duties, the representative will be compensated for their services and often have to contract with professionals, on behalf of the Estate.

This person will be given a document by the Court, naming them personal representative, and use this document in conjunction with the Death Certificate to execute the objectives in the Will.  (Because of differences in State laws, your particular state might have slightly different requirements.)

What exactly do they have to do?

First, the personal representative has to appear in Court so that they can be duly appointed.   Then the fun starts.  They first have to locate your assets and ascertain their value on the date of death.  Sometimes, appraisals  are necessary.  They also have to notify your creditors of your passing, and place newspaper ads announcing your death.  They also have to pay on-going expenses and are allowed to sell some property from the Estate to help afford these expenses.

When the Will is found (or similar document) the representative has 10 days to lodge it with the Probate Court.  If there is a safe deposit box, the heir can request that a bank official open it in search of a Will and other relevant documents.  If found, they will lodge the Will with the Probate Court.   At that point, the personal representative can be officially appointed.  Once appointed, the Representative can engage in a search for the other documents needed to faithfully represent the deceased.

What can I do to make it easier for my Personal Representative to do their job?

There are a number of things that you can do:

1.Establish and maintain a listing of all of your assets and accounts.   This list will change over time, so, please treat it like the living document that it is and make updates regularly.   Make sure that your Personal Representative has access to this inventory.

2.In addition to your list of assets, be sure to have a list of your creditors too.  Include in this document plenty of contact information (e.g. telephone numbers, e-mail addresses and the like.)

3.If you keep a Will in a safe deposit box at a bank, be sure to keep 2 copies there.  The Bank will have to lodge one copy with the Court, and the Personal Representative will need the other copy.

4.If you nominate  somebody to be personal representative for you and they refuse, it would be much better if you also had 1-2 back

What if I have to act as Personal Representative for Somebody Else?

If you are Personal Representative for somebody else, there are several things you can do to make the process easier:

1.Be sure to get 2-3 certified copies of the Death Certificate.   In the vast majority of cases, a photocopy will suffice, but sometimes, you need to use a certified copy of the document.

2.File an SS-4 with the IRS to obtain an FEIN for the estate.

3.Prepare a Notice of Appointment Form to inform external parties and creditors that you are the Personal Representative.

4.Setup an accounting system to track expenses associated with the Estate.

5.Do an inventory of the Estate property within 3 months.

6.You must respond to all written claims on Estate assets.   Now, creditors fall into different classes, each with a different priority on assets.    So, please wait until the creditor window is closed before paying each class of creditor equitably from Estate assets.

7.If there is stock or other securities in the Estate, the Personal Representative must send a copy of their letter of Appointment to the transfer agent.

8.You will have to file a final tax return for the decedent, and then for the Estate itself.  (It is usually a good idea to engage the services of an attorney and an accountant to approach this.)

9.After all distributions are made, you must close the estate.   To do so informally, you can lodge an affidavit with the court.  To close the Estate formally, you would receive Court approval to proceed in the closing of the estate.

The Verdict

Being appointed a personal representative can be both a blessing and a curse.  On one hand, it is a blessing that the deceased held you in such high regard, that they put you in charge of disposition of their assets at their death.  On the other hand, the detail-oriented tasks that you are required to attend to can be tedious and time-consuming.  I suppose that it can also serve as a part of your grieving process as well.  The bottom line seems to be that if you really loved a person while here on Earth, you should probably feel a responsibility to ensure that their wishes are carried out, after they’re gone.  Even if it is, taxing.






Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

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