CHOOSING A PERSONAL

REPRESENTATIVE

Bill TaylorNortheast Area

Community Development

Educator

What is a “Personal Representative?” (PR)

• The person who will carry out your plan for the settlement of your estate

• “A fiduciary in charge of settling a deceased person’s estate.”

• Also referred to as “Executor/Executrix” or “Administrator”

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How Important?

• Your choice could mean the difference between a harmonious and complete settlement and one bogged down in a legal and financial quagmire

• Your choice may be better and more in line with your views than a PR appointed solely by the probate court

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Approved and Appointed by Probate Judge

• Testate Estates (a will is present)– In most cases the person or entity designated in the will is approved

and appointed• Exceptions

– Designee doesn’t meet legal requirements– Successful contest that invalidates will or disqualifies named PR

• Intestate Estate (no will)– State statute dictates order

• Spouse (or someone they wish to appoint)• Children• Parent• Brother or sister• Grandchildren• Etc.

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Duties

• Carry out written instructions of the decedent relating to his or her body, funeral, and burial arrangements.

• Arrange for the immediate needs of survivors• Locate the will and other important papers and

information• Make application to probate the will, to

terminate joint tenancy, and/or for appointment as personal representative

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Duties (cont.)

• Select an attorney to handle the estate (if necessary)

• Give legal written notice of his or her appointment to heirs and devisees

• Indicate whether bond has been filed and describe to court where papers relating to estate are on file

• Take possession of estate property, as advisable

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Duties (cont.)

• Notify decedent’s life insurance companies.• Pay expenses for last illness, funeral and burial

expenses, and other outstanding debts• Have real and personal property appraised• Prepare an inventory of all of decedent’s

property• Publish a notice to creditors for debts of which

PR may be unaware

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Duties (cont.)

• Prepare and file a federal estate tax return if the estate is subject to estate tax (presently exceeding $5 million)

• Prepare and file state (if applicable in decedent’s state of residence) and federal income tax return for decedent’s last year of life and, if necessary, for the estate

• Arrange for care or guardianship of minor children and any other incapacitated family members

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Duties (cont.)

• Determine which estate assets will be needed to pay federal estate taxes (if due) (presently $5 million threshold), administration expenses and other costs of settling the estate

• Satisfy charitable pledges in decedent’s will• Ascertain values at date of death for all of

decedent’s bank accounts. Depending on circumstances, close those accounts and open an estate account

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Duties (cont.)

• Deposit or invest liquid assets of the estate in federally insured interest-bearing accounts, readily marketable secured loan arrangements or other prudent investments, if funds are not needed to meet debts and expenses currently payable

• Notify various state and federal agencies of the decedent’s death and discontinue automatic deposits into and debits from decedent’s accounts

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Duties (cont.)

• If necessary:– Sell property– Operate the decedent’s business until disposal– Negotiate terms of purchase of decedent’s interest

in a closely held business

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Duties (cont.)

• Receive payments due the decedent and estate (dividends, unpaid wages, other benefits)

• File all required documents with the probate court in a timely manner

• Distribute assets to beneficiaries as required by law of intestate succession (no will) or by decedent’s will

(Next month, Mary Martin will go into these duties in detail)

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What Does A PR Get Paid?

• Fee schedule established by state law:– 1st $1,000 of estate basis (does not include trust property, jointly

titled property, bank accounts with transfer-on-death designation, life insurance, etc.) – 10%

– Next $1,001-$5,000 – 5%– Next $5,001-$20,000 – 3%– Any amount over $20,000 – 2%

• An estate valued at $200,000 would net a fee of $4,350• The PR may waive all or part of the fee• Court usually grants payment of expenses incurred by PR • Court may grant extraordinary fees for extra expenses

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What Will it Cost the PR?

• Required to file bond equal to value of the personal property, and the probable value of the annual rents, profits and issues of real property

• Bond is not required if stated in will or waived by beneficiaries

• Significant time, effort, and possible stress investment– The process could take a few months up to several years

• Could involve significant travel, if not located nearby• Possible monetary expense if fee and expenses waived

or estate is of insufficient value to pay them

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Can You Choose Multiple PRs?

• Yes• Unless provided otherwise in the will, all are of

equal authority and must agree and sign-off on all decisions – this can be very cumbersome and create stress and disagreement

• Sometimes PRs with differing skills are chosen to handle different parts of the estate – i.e. guardianship, personal property, finances, investments, etc.

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Questions to Ask

• Does your candidate have enough time? May be very time consuming.

• Does your candidate live in Wyoming? Significant travel may be required if out-of-state.

• Is your candidate elderly or infirm? Will they be of sound mind and health when it comes time to administrate your estate?

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Questions to Ask (cont.)

• Does your candidate have the expertise needed? Can they handle property assessment, appraisal, financial accounts, investments, estate income and expenses, and final distribution of assets?– Your PR can obtain outside assistance and

expertise, if needed. However, associated fees will come out of the estate.

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Qualities to Look For

Suggested by Hershner Hunter:• Ability. Maturity, judgment, ability to make financial

decisions. For a guardian, someone with children may be better able to adjust to the addition of your children.

• Availability. Does the person have the time to carry out the task? May involve significant time commitment.

• Geographic Proximity. Do they live close enough to permit efficient administration of your estate? In case of a guardian, do they live where you would want your children?

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Qualities to Look For (cont.)

• Trustworthiness. You should trust them implicitly.

• Willingness. Are they willing? Always ask them first.

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Qualities to Look For

Suggested by Julie Garber:• Extremely loyal and fair. Loyal to your

beneficiaries and fair with multiple beneficiaries.

• Extremely trustworthy. Can be trusted with large sums of cash and other properties, and can invest and sell them capably.

• Practical. Have common sense and able to make practical decisions.

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Qualities to Look For (cont.)

• Organized. Can handle and balance multiple accounts, pay bills, receive payments, file documents, and keep records.

• Tough. Needs a thick skin to deal with greedy beneficiaries, vast amounts of red tape, and unforeseen circumstances.

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Further Considerations

• Do not appoint the same person to be guardian of children and to have financial oversight– Can create serious conflict of interest

• Must be 18 years of age or older• Might want to consider bank w/ trust powers or

another corporate fiduciary or attorney, especially for a long-lasting trust– A corporate fiduciary will tend to last longer, be more

consistent, and have more intimate knowledge of trust and investment issues

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Further Considerations (cont.)

• Consider carefully your choice of guardian– How do their values and lifestyle compare to yours?– Will your children continue with the faith teachings that are

important to you?– Will your children have to move? What type of environment

will they be in?– If you choose a non-family guardian, will family members

still be able to maintain a productive relationship with your children?

– Will the proposed guardian have the resources to provide the education and opportunities you feel are important for your children?

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Who Should I Consider?

• With all of the above considerations, list possible:– Relatives

• Presumably they will understand your intentions best & can readily find your assets

• Often assumed they will forego the fee

– Friends– Attorneys

• Your personal attorney or one who has a trusted reputation• Check references

– Banks or other corporate trust fiduciaries• Your personal bank or corporation or one which you trust and has a

good reputation• Check references

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Considerations for an Institutional Fiduciary

• Will the beneficiaries of my estate benefit from the professional investment or tax expertise of the institution?

• Are the fees charged by the institutional fiduciary reasonable?

• Who at the institution will be involved in the administration of my estate and will those team members work well with my family or other beneficiaries?

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How to Choose

• Construct a list of possible names that you feel best fill the listed qualifications

• Start eliminating those you are least satisfied with or seem the most unlikely to carry out all the required duties

• When you have shortened the list to two names, decide which one will be your primary PR and which will be the alternative

OR• Choose a guardian, a general estate representative and/or a

financial representative, each with delineated responsibilities

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After Your Choice

• Be sure to notify the person and/or institution you have chosen as PR that you have done so

• Provide them with a copy of your will unless it will be confidential until your death

• Inform them of where all your accounts and legal documents are located or where to find a list

• Provide them with information on what is expected of a PR and of any special expectations you will have of them

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References

• Goetting, Marsha, Ph.D, CFP, CFCS. Personal Representative Responsibilities. Montana State University Extension MontGuide MT199008HR Revised 5/12

• Hunter, Hershner, LLP. Choosing a Guardian, Personal Representative or Trustee. Hershner Hunter Attorneys, http://www.hershnerhunter.com/articles/choosing-a-guardian-personal-representative-or-trustee

• Reed, RoseMary; McCaw, Elizabeth. Your Personal Representative: Basic Duties & Responsibilities. Estate Planning Council of Seattle, http://www.epcseattle.org/articles.cfm?articleID=10

• Garber, Julie. How to Choose a Personal Representative: Loyalty, Trust and Common Sense. About.com: Wills & Estate Planning, http://wills.about.com/od/choosingfiduciaries/tp/qualitiesofpr.htm?p=1

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References (cont.)

• Garber, Julie. What is a Personal Representative? And How is a Personal Representative Appointed? About.com: Wills & Estate Planning, http://wills.about.com/od.howtoavoidprobate/a/whatisapr.htm?p=1

• Garber, Julie. Duties and Responsibilities of a Personal Representative: Getting Through the Probate Process. About.com: Wills & Estate Planning, http://wills.about.com/od/choosingfiduciaries/a/choosingprs.htm?p=1

• Garber, Julie. How Much Does a Personal Representative Get Paid? Getting Paid for Services Rendered. About.com: Wills & Estates, http://wills.about.com/od/howtoavoidprobate/tp/personalrepfee.htm?p=1

• Blog by David. Choose the Right Personal Representative for your Estate. Sound Advocates Attorneys for Law Group PLLC, April 4, 2011, http://www.soundadvocates.com/wills/choose-the-right-personal-representative-for-your-estate/

• Jacobs, Deborah. Choosing the Right Executor for Your Estate. The New York Times, March 2, 2011, http://www.nytimes.com/2011/03/03/business/retirementspecial/03EXEC.html

• Email communication with Aaron J. Lyttle, Attorney at Law with Long, Reimer, Winegar, Beppler, LLP; Cheyenne, WY

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Stay Tuned

Next month Mary Martin will talk in greater detail about what is expected and required of the Personal Representative.

FEBRUARY 7TH, 7:00 P.M.

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Upcoming Programs

• February 7 – So Now You Are An Executor• March 7 – Who Gets My Personal Stuff?• April 4 – Taking Care of Your Important

Documents

All at 7:00 p.m.

Go to http://www.uwyo.edu/ces/money/ for connection details

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