First of all, what is a Personal Representative? A Personal Representative (PR) is the individual designated to administer an estate when a person dies. In other words, they are responsible for inventorying and taking control of the decedent’s (deceased person) assets, using estate assets to pay estate debts and taxes, notifying beneficiaries and creditors, and distributing property from the estate to the beneficiaries. In some states, the Personal Representative is known as an Executor.
Main duties of the Personal Representative:
• Find out if the decedent has a Will. This person should make a reasonable effort to determine if the decedent had a Will. If so, the PR should attempt locate the original will so that it can be submitted to the Court with the application or petition for probate.
• Apply or Petition for appointment as Personal Representative. Although a Personal Representative (PR) may be nominated in a Will, he or she does not actually become the Personal Representative until they are appointed by the court as part of a process known as Probate. In Minnesota, many estates can be probated by filing papers administratively without ever having to appear in court.
• Open a checking account for the estate. Once the PR has been appointed, he or she will need to open a checking account in the name of the estate. This account will be used to receive funds for the estate and pay debts and expenses. The account should be opened using the estate’s own Employer Identification Number (EIN) and not the PR’s social security number.
• Collect and protect assets. Once a PR has been appointed, they have the power to take control of the decedent’s assets. In addition to collecting those assets and funds, the Personal Representative must make sure that the assets are secure and protected, including verifying insurance on assets if necessary. The PR is required to inventory and determine the value of all of the assets as of the time of the decedent’s death. This inventory will be served on all of the beneficiaries of the estate, as well as creditors that have filed a demand for notice with the court. The PR must determine whether the property of the estate will be liquidated (sold) or distributed to the heirs “in-kind”.
• Pay creditors. The estate is required to pay valid claims made by the decedent’s creditors. Additionally, expenses of administering the estate; including, taxes, attorney’s fees, and other costs must be paid. Income taxes for the decedent’s last year of life will need to filed, as well as a “fiduciary” tax return for the estate using the estate’s EIN. The PR is charged with ensuring these claims get paid.
• Accounting. The PR should keep a record of all of the assets of the estate as well as receipts and disbursements made during the administration of the estate. Doing so can help the PR avoid conflicts and liability. Additionally, this information will be used to generate a Final Account. The Final Account will be sent to interested parties in the estate for approval and may be filed with the court.
• Distribute the assets. Once the final account has been approved and creditors have been paid, the PR can distribute the remaining assets in accordance with the decedent’s Will or, if no Will, Minnesota’s Intestacy Statutes.