The Crucial Role of Personal Representatives: Selecting the Right Guardian of Your Legacy

PURPOSE OF PERSONAL REPRESENTATIVE

A personal representative is a fiduciary that acts on behalf of an estate until all estate affairs are settled and the estate is properly closed with the court's approval. 

A fiduciary's primary role is to administer the estate according to the terms of the will or trust document or pursuant to state intestacy laws. A fiduciary may also make decisions on behalf of an estate regarding matters not addressed in properly executed documents, such as paying bills, the sale of estate, and paying off debts. Fiduciaries have the duty to act in the best interest of the estate's beneficiaries, to act in good faith, with loyalty, honesty, and transparency. Therefore, fiduciaries are legally and morally obligated to look out for the interests of those they serve.

As the executor of a deceased person's estate, a personal representative generally handles several duties, such as organizing funeral services, notifying those who are entitled to a part of the estate's property, gathering and determining the value of the estate, selling the estate assets (if necessary), paying all debts and taxes, distributing the estate to heirs and beneficiaries, filing of reports to the probate court, and closing the deceased loved one's estate. 

Please refer to this link to see the complete duties and responsibilities of a personal representative.

IMPORTANCE OF SELECTING A PERSONAL REPRESENTATIVE

Who you choose as your representative or fiduciary is one of the most important decisions you will make throughout your lifetime. The failure of the person you appoint to administer your affairs may be the downfall of the legacy you worked hard for in your lifetime.

The following are some considerations to keep in mind when selecting someone to act on your behalf:

Knowledge: Do they know what they are doing? Do they understand all tax laws and their effect of particular selections on the estate? If they do not have the knowledge, will they hire the appropriate professional to guide them through the process such as an attorney or tax professional?

Experience: Have they done this before? Do they have the capability to manage complicated affairs? Do they have an understanding of the structure of your life? Is the individual sophisticated enough or knowledgeable to manage an estate? 

Honesty: If there is any doubt about their truthfulness, it would be best to reconsider selecting that person to an estate.

For more information about selecting the right fiduciary for your estate, please refer to this link.

IMPACT OF PERSONAL REPRESENTATIVES' FAILURE ON BENEFICIARIES

When a personal representative fails to settle the estate in a timely manner, it negatively affects beneficiaries.

1.  The physical health of the beneficiary may be at stake. 

A beneficiary's life and death may be at stake if they depend on their inheritance to pay for necessary medical care but cannot do so due to a lack of funds. 

2. The mental health of the beneficiary may be at stake.

Personal Representatives' failure can lead to beneficiaries' emotional stress, which can threaten the beneficiaries' safety, health, and financial well-being. Besides inheriting money, family estates also bring about a sense of belonging for beneficiaries. Their families' legacies live on through the assets they receive.

3. The financial value of the beneficiary's inheritance may be at stake.

For example, the physical property can deteriorate and lose its value before being sold. If personal representatives don't pay their liens associated with estate property, then the creditors may foreclose on the interest and then the estate and the beneficiaries may experience a complete loss.

MERYN KLABOUCH’S AGONY WITH HER PERSONAL REPRESENTATIVE

Meryn Klabouch is an incapacitated 74 year old who resides in the Upper East Side of New York. When her father, Francis, died in 2015, she inherited $1 million from his estate which provided for the costs of her private care. Meryn was also a beneficiary of her aunt Dolores Morrissey, who was CEO of Mutual of America Insurance Co. who died at age 88 in 2016, she left her a large portion of her probate estate. Meryn Klabouch is suffering and is paralyzed from multiple sclerosis. She has to spend $20 000 to $30 000 monthly for medication. Her heritage from her father is running out to support her life-saving medical care and aides. Without the money from her aunt's estate, she would have no way to afford her treatment and maintenance or to pay doctors, therapists, and caretakers.

Dolores Morrisey's estate is roughly $ 2 million plus. It included cash, stocks, and a $1 million Yorkville Co-op. However, the money has never materialized. She also left money to about a dozen relatives, but no one has received their distribution from the estate. During an eight-year court battle, Janina Lewandowska, Dolores Morrisey's executor and her former home health aide, allegedly mishandled this inheritance.

According to Meryn Kablouch, Janina Lewandowska has let costs mount up, failed to distribute the funds to the beneficiaries, and let her aunt's home sit empty for almost a decade before selling it a lower amount in July for $825,000. 

Meryn Klabouch recently received an $80 000 payout, but she fears that the executors' gas wasted the entire estate. Janina Lewandowska claimed that the co-op was to blame for the prolonged sale of the apartment, and she informed the court that only $161,000 was left.

Klabouch said she has tried to find out what happened to Morrissey's money, but Lewandowska has ignored court orders and declined to provide any financial information. 

According to Klabouch's Attorney, they do not know if the estate still exists or if the executor has wasted it all. It is also believed that the executor anticipated her death and intended to keep the money for themselves.

SIGNS THAT EXECUTORS MAY BE MISMANAGING THE ESTATE

1. Personal representatives need more communication with the beneficiaries.

2. The process is being delayed, or it's taking so long.

3. The personal representative's inventory is delinquent

4. Personal representative is delaying or withholding the distribution of inheritance

5. Personal representative is allowing valuable assets' insurance to expire or be insufficient

6. Personal representatives sell the estate assets below their market value.

7. Personal representative is making creditor claims against an estate or using estate assets for personal expenses

You should always choose an honest, diligent and capable personal representative who will execute all duties without fail. Failure to do so may result in negative consequences.

Remember that a good personal representative will attempt to meet their duty to the estate and the beneficiaries of the estate.

One way to ensure that you are selecting  the right person for the job is by asking very intuitive questions and also truly understanding the capabilities of the nominated individual.
Great legal advice can also be invaluable to help you make a better decision when it comes to choosing a personal representative. Contact our office at 678-855-600 to give you an excellent advice in choosing your personal representative.