For example, here is the priority list for serving as an administrator in Oklahoma: Surviving spouse or a person the spouse nominates Children Mother or father Brothers or sisters Grandchildren Next of kin entitled to inherit under state law Creditors Any legally competent person So when an Oklahoma resident dies without naming an executor, the surviving spouse is first in line to be appointed as administrator.
New Jersey, for example, provides this short list: Spouse or domestic partner Other heir person entitled to inherit under state law Any other person N. Factors Courts May Consider Even if someone is nominated in a will to serve as executor, or is entitled to priority for appointment in a state statute, the court has the final say over who actually serves as the personal representative. Here are some factors that may or may not serve as reasons for disqualification: Age.
No state allows persons under 18 to serve as a personal representative; many set the minimum age at Criminal history. Some states forbid persons convicted of serious crimes from serving. See, for example, Washington Rev. Others require only that anyone who has been convicted of a felony inform the probate court.
For example, Oregon follows that rule. Business relationship. In Oklahoma, if the deceased person was a member of a partnership at the time of death, the surviving partner must "in no case" be appointed as administrator. All states allow persons who don't live in the state, under certain circumstances, to serve as personal representatives.
A few states allow this only if the person is a close relative. Many others require a non-resident to post a bond or appoint an in-state agent for service of process that is, to receive communications from the court. There isn't much law on this, but the courts that have considered the question have ruled that noncitizens may serve as executors.
Most probate proceedings are neither expensive nor prolonged. Some assets, such as brokerage accounts, may be accessed immediately; others, such as insurance, may have to be applied for by filing a claim. Depending on the nature and value of the property, this may be a routine activity, but you may need the services of a specialist appraiser if, for example, the decedent had rare or unusual items or was a serious collector.
Real estate, whether it is a home or commercial property, and any business interests must also be valued. The fiduciary also must value financial assets, including bank and securities accounts. In some cases, such as property or casualty insurance bills or real estate taxes, the estate may be harmed if the bills are not paid promptly.
Most states require a written notice to any known or reasonably ascertainable creditors. While most bills will present no problem, it is wise to consult an attorney in unusual circumstances, as the fiduciary can be held personally liable for improperly spending estate or trust assets. The fiduciary is responsible for a number of tax returns.
Since the estate or trust is also a taxpayer in its own right, a new tax identification number must be obtained and a fiduciary income tax return must be filed for the estate or trust as well. It is important to note for planning that the estate or trust and the beneficiaries may not be in the same tax brackets. Thus, timing of certain distributions can save money for all concerned.
Some law firms such as White and Williams LLP , and other tax preparers and accountants specialize in preparing such fiduciary income tax returns and can be very helpful. They are familiar with the filing deadlines and will be able to determine whether the estate or trust must pay estimated taxes quarterly.
Careful records should be kept and receipts should always be obtained as most of such expenses are also deductible either for income or death federal and state inheritance and estate tax purposes. The residue may be distributed outright or in further trust, such as a trust for a surviving spouse or for minor children. Be sure that all debts, taxes, and expenses are paid or provided for before distributing any property to beneficiaries. Although it is usual to obtain a receipt, release and refunding agreement from the beneficiary that states that he or she agrees to refund any excess distribution made in error by the fiduciary, as a practical matter it is often difficult to retrieve such funds.
In some states, the fiduciary will need court approval before any distributions may be made. Where distributions are made to ongoing trusts or according to a formula described in the will or trust, it is best to consult an attorney to be sure the funding is completed properly. Tax consequences of a distribution sometimes can be surprising, so careful planning is important. Estates close when the executor has paid all debts, expenses, and taxes; received tax clearances from the IRS and state taxing authorities; and all assets on hand have been distributed.
Trusts terminate when a date or event described in the document occurs, such as the death of a beneficiary or the date the beneficiary attains a stated age. Some states require a petition to be filed in court before the assets are distributed and an estate or trust can be closed.
When such a formal proceeding is not required, it is nevertheless good practice to require all beneficiaries to sign a document, prepared by an attorney, in which they approve of actions as fiduciary and acknowledge receipt of assets due them.
This protects the fiduciary from later claims by a beneficiary. A final income tax return must be filed and a reserve kept back for any tax that may be due. A question often arises concerning the fees or commissions to which a personal representative is entitled for services rendered to the estate. The first place to check is the statutory law of the state where the estate is probated.
Some states have standard fixed fees. PLEA's Safety Planning Tool is designed to help people dealing with violent relationships by providing them with strategies to increase their safety. By answering anonymous and confidential questions about their situation people can create a safety plan specific to their situation and their needs.
PLEA gratefully acknowledges our primary core funder the Law Foundation of Saskatchewan for their continuing and generous support of our organization. Q Must I Act as Executor? A In some cases, you may be unable or unwilling to take on the responsibility of acting as Executor.
Beneficiaries of the Estate Executors and Administrators can distribute the estate to the beneficiaries once all debts and liabilities have been dealt with. Leave this alone. Beneficiaries of a will also have a right to contest a will and object to the personal representative the decedent named in the will. This usually results in a trial, where a judge will make the ultimate decision as to who will serve as personal representative—either the personal representative named in the will or another party nominated by the beneficiaries.
An interested person can petition the court to remove the personal representative, or request supervised administration. The petitioner can also petition the court for a temporary restraining order to stop the personal representative from doing a certain act. Alaska Court System. Estate Planning. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.
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How They Work. Personal Representative vs. Advantages and Disadvantages. Personal Representative FAQs. Key Takeaways A personal representative or legal personal representative is the executor or administrator for the estate of a deceased person. Pros of Being a Personal Representative It is an honor to be asked Personal representatives may receive compensation for carrying out their duties. Cons of Being a Personal Representative Time consuming The process of dispersing an estate can involve complicated financial tasks The process can be fraught disputes with co-executors and disputes among heirs.
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