Information for Executors and Personal Representatives
The Fiduciary Duty of Executors, Personal Representatives, and Trustees
As an executor, administrator, personal representative or trustee, you have a fiduciary responsibility to the heirs of the estate or beneficiaries of the living trust to follow the terms of any will or trust of the deceased as well as the requirements of applicable state law. Your primary duties are to safeguard the assets of the estate or trust; administer and manage the estate or living trust; and ensure all assets of the estate or trust are properly distributed to the rightful heirs and beneficiaries.
Executors, administrators, personal representatives, and trustees must act diligently, prudently, and in good faith at all times. You cannot invest estate or trust assets in speculative or high risk investments, and must keep funds that are not needed in the short-term by the estate or trust invested in safe, interest-bearing investments such as bank savings accounts and short duration U.S. treasury bonds.
If you breach your fiduciary duty, you are personally liable to the heirs or beneficiaries for damages caused by such breach. This means if you are found to have breached your fiduciary duty to the estate or trust, you could be paying money out of your own pocket to the beneficiaries or heirs. Also, you cannot use the assets of the estate or trust for personal use. If you take money from the estate or trust and put it in your own account or otherwise use such funds for yourself, you can face criminal charges. If you are unsure about whether you can take a particular action when administering an estate, ask a probate lawyer.
If You Are Unable to Serve as Executor or Personal Representative of an Estate
Being an executor, administrator, personal representative or trustee is a big responsibility. It can be overwhelming, especially if it’s a complicated estate or there is a dispute over an inheritance among the heirs. Perhaps you were asked to be executor or administrator at a time when you have a lot of other responsibilities. Maybe you feel you are not detail-oriented or financially savvy enough to handle the work. Whatever the reason, remember there is no legal requirement that you serve as executor or trustee. Even if you were appointed by the probate court to serve as administrator or personal representative, you can file a request with the court to have another individual take over management of the estate.
If there is an alternate executor named in the will or a successor trustee named in the living trust, you can request that person fill the role instead. Even if there is not another family member or friend of the deceased to serve, the court can appoint another personal representative. Another option is to hire a probate lawyer to handle a portion of the work or provide you guidance on the tasks with which you are uncomfortable.
Because of the fiduciary duty required of all executors and trustees, it is better to decline to serve than to start administering the estate and find out you are over your head or that you made mistakes that caused a financial loss to the heirs or beneficiaries. If you think you will be unable to do all the things required of an executor or trustee, don’t attempt it anyway. If you fail to administer the estate or trust as required, even if such failure is unintentional, you can be held personally liable.
A Durable Power of Attorney Does Not Give You Authority To Be Executor
The authority granted to an agent under a Durable Power of Attorney ceases at the time of the principal’s death. Many people mistakenly assume that a Power of Attorney authorizes them to act as executor of the decedent’s estate. After the principal dies, the agent under a Power of Attorney has no authority to act. Instead, the person named as executor in the deceased person’s will or appointed by the probate court as personal representative is authorized to administer the decedent’s estate.
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