When Can a Personal Representative of an Estate be Held Personally Liable?
- posted: Aug. 15, 2021
- Wills & Probate
A personal representative is someone charged with handling the administration of a decedent’s estate, whether as an executor under a will or as a court-appointed administrator if the decedent had no will. The personal representative must carry out his or her role in accordance with Kentucky law. In certain circumstances, failure to adhere to relevant laws could result in personal liability, meaning the representative might have to pay the estate’s creditors or beneficiaries out of pocket for any diminution of property or other losses.
The personal representative’s numerous responsibilities include:
- Using reasonable efforts to locate the most recent will (if any)
- Starting the probate process by filing the appropriate petition in court
- Within two months of being appointed, file an inventory of all the estate’s assets and debts, which means getting documentation from banks and investment firms, locating real estate deeds and mortgage information and tracking down valuables that may be in the deceased’s home or safety deposit boxes
- Determining which assets belong in probate and which can pass outside of probate
- Opening a bank account in the name of the estate and deposit all liquid assets into it
- Arranging for probate proceedings in any other state where the deceased owned property
- Collecting any debts owed to the deceased
- Paying valid creditor claims according to the priority set forth by law
- Filing final income tax returns
- After all debts and taxes are paid, distributing any remaining assets to the heirs/beneficiaries
- Filing an accounting for the final settlement of the estate in probate court
A personal representative could become personally liable at various points during this process. For example:
- A personal representative is liable for obligations arising from ownership or control of the estate or for torts committed in the course of administration for which he or she is personally at fault
- Creditors have six months to file claims against the estate. If the representative distributes estate property to heirs before six months have passed and there is not enough property left to satisfy a valid creditor claim, the representative could be personally liable
- If the personal representative enters into a contract on behalf of the estate without identifying the estate or revealing that he/she is acting as a representative, he or she could be personally liable for fulfilling the contractual obligations
Executors and administrators can best avoid being held personally liable by retaining legal counsel to make sure all the bases are covered. A probate and estate attorney can help the personal representative understand and complete all the required tasks while avoiding conflicts of interest and minimizing the chances of creating personal liability. The attorney’s fees are a legitimate expense of the estate, so they usually should not cost the personal representative anything.
The lawyers of Hemmer DeFrank Wessels PLLC are very experienced in Kentucky probate and are ready to help. Please call our Fort Mitchell office at [ln::phone] or contact us online to get started.