Friday
Jan292010

Your Role as a Florida Personal Representative

You have been nominated to serve as Personal Representative for a deceased person (“the decedent”). You will be in charge of carrying out the decedent’s plan as expressed in the Will. To perform this role well, you do not ordinarily need special financial or legal training. Common sense, conscientiousness and honesty are the main requirements. Should you need help, you will be able to hire lawyers, accountants or other experts and pay them from the decedent’s assets. So, as you learn about the duties of  Personal Representatives, keep in mind that you can always hire someone to guide you through the process of estate administration.

As Personal Representative, your duties are likely to include:

  1. Deciding whether probate court proceedings are needed, or whether the amount and type of property covered by the Will means it can be distributed without probate.
  2. Deciding whether there are simplified procedures that allow the immediate transfer of at least some assets to the people who are entitled to these assets due to the death of the decedent.
  3. Marshaling of assets and identification of heir(s), including a search for “unknown assets” (such as via www.fltreasurehunt.org) and a search for heirs who need to be located and notified (may need genealogical services to assist you in this regard).
  4. File the Will (and any Codicils) in the appropriate Court.
  5. Review Testamentary Plan with beneficiaries (and serve the correct notices of administration upon the appropriate beneficiaries).
  6. Obtain documents to qualify you as Personal Representatives (death certificates, waivers and bonding documents).
  7. File Probate Pleadings in Court to have the Will admitted to probate and to have you appointed by the Judge as the Personal Representative.
  8. Sending notice of probate to persons (relatives) who would have been entitled to the decedent’s estate but for certain provisions in the Will.
  9. Securing all probate and non-probate assets and sensibly managing probate assets during the period of administration (which can take more than a year).
  10. Handling day-to-day details of the estate, such as terminating service contracts, leases, etc., notifying government agencies (e.g., social security, Medicare, V.A., etc.) that you are handling the decedent’s affairs and seeing that mail is appropriately forwarded and change-of-address notices are timely made.
  11. Setting up of appropriate bank and brokerage accounts to hold money and assets belonging to the decedent’s estate.
  12. Establish and maintain all books and records of the estate for accounting(s).
  13. Paying continuing expenses of the estate (e.g., mortgage payments, utilities, taxes, maintenance, insurance, etc.).
  14. Paying any debts that the estate is legally required to pay. As part of this requirement, you must identify any “reasonably ascertainable” creditors and provide notices to them. Creditors then have a specific time frame in which to assert a claim against the estate (usually three months). You must also decide whether a claim is or is not valid.
  15. File and serve objections to creditors’ claims which you decide are not valid claims against the estate.
  16. Prepare applicable I.R.S. form(s) (such as form numbers 56, SS-4, 1041, W-9, K-1, etc.) for execution by all appropriate parties and see that appropriate forms are served on parties and/or filed with I.R.S.
  17. See that decedent’s final income tax return (form 1040) is filed and that any unpaid income taxes are paid in a timely fashion to avoid penalties and interest.
  18. See that the estate receives any income tax refund for overpayments.
  19. Generally obtain and review documents, correspondence, contracts, memoranda, tax returns, etc., relevant to the decedent’s assets and liabilities.
  20. Gather information about and value non-probate assets in which the decedent had an interest (such as life insurance, joint bank accounts, etc.).
  21. Obtain appraisals for unvalued estate assets.
  22. Invest cash balances in interest-bearing, money-market or equivalent accounts, and see that investments are properly allocated and/or diversified to further satisfy Prudent Investor requirements.
  23. Prepare Notice Concerning Fiduciary Relationship (form 56) for the I.R.S..
  24. Maintain sufficient cash assets to meet ongoing needs of the estate and raise funds if necessary (i.e., to pay estate taxes, creditors’ claims, etc.).
  25. Determine and pay funeral and administrative expenses (Court costs, attorney’s fees and accountant’s fees, etc.).
  26. See to the publication of Notices of Administration.
  27. Prepare, and serve estate Inventories (initial and amended).
  28. Prepare Preliminary Notice and Report or Affidavit of No Estate Taxes Due.
  29. Consider post-mortem planning in conjunction with attorney for estate and tax advisors (as to federally taxable estates).
  30. Prepare Affidavits of Domicile.
  31. Revalue assets as of six months after date of death for federal estate-tax purposes.
  32. Arrange for estate representation by CPA on routine audits.
  33. File federal estate tax return (form 706) along with payment of estimated estate tax payment.
  34. Obtain Federal estate tax closing letter (for federally taxable estates).
  35. Protect decedent’s pets and see that they are relocated in accordance with decedent’s wishes.
  36. File petition to recognize Florida homestead and obtain protective Order re same.
  37. In estate “pour-over” situations, see that other fiduciary (trustee) has been notified and is able to receive distribution.
  38. Pay or satisfy all estate beneficiaries and heirs.
  39. Prepare and obtain Receipts of beneficiaries and heirs and file same in court.
  40. Prepare, serve and file Accountings as necessary or obtain waivers re same.
  41. Obtain Discharge of Personal Representative and file same in court.
  42. Complete plan of distribution as set forth in final Order Closing Estate.
  43. Close estate.

The foregoing list is illustrative and not necessarily all-inclusive, because the Duties of a Personal Representative of an estate vary greatly depending upon the nature of the estate assets (business assets, real estate, stocks, bonds, personal property, etc.), and the value of the gross estate (including both probate and non-probate assets). Many of the duties enumerated above may be expanded greatly or eliminated entirely. For example, if there are real estate or business assets to be disposed of, steps may have to be taken to protect, insure, manage, and then actively market and sell said property. Creditor’s claims, when same are objected to by the Personal representative, may require separate litigation, including mandatory mediation.

For sizable estates (in excess of the federal estate-tax threshold – which may be anywhere from $600,000 to  more than $3.5 million, depending upon the date of death of the decedent) –  those services relating to the preparation and filing of a federal estate-tax return (form 706) will be necessary,  and advanced post-mortem estate planning is usually required. Additional legal and tax-accounting services from professionals (lawyers and accountants) are to be obtained by the Personal Representative.