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Serving as Personal Representative of a loved one's estate can seem like a daunting responsibility. The following are some of the most important tasks a Personal Representative must accomplish during the estate administration process:
- Appointment by Probate Court: File a Petition with the Probate Court seeking official appointment as Personal Representative. Assuming the Petition is approved, the Probate Court will issue "Letters of Authority," which is the Court's blessing for the Personal Representative to begin acting on behalf of the estate. Financial institutions will require a copy of the Letters of Authority before allowing a Personal Representative to deal with the decedent's probate assets. Probate assets are any property owned by the decedent in his or her sole name. They do not include assets held in trust or any asset with a beneficiary designation, such as a retirement account or life insurance policy.
- Open an Estate Account: Transfer probate bank accounts and other probate assets out of the decedent's individual name and into the name of the estate. This requires obtaining a separate tax identification number for the estate.
- Creditors: Notify organizations with open accounts in the decedent's name of the decedent's death to help prevent fraud. This includes accounts such as a phone company, utilities, credit cards, and checking/investment accounts in the decedent's sole name. A review of the decedent's personal papers, bank statements, and mail is frequently helpful in identifying all of the accounts to be notified.
- Inventory: Compile an inventory of the decedent's assets. Identify and notify heirs and interested parties to liquidate and/or transfer title of the assets to the intended beneficiaries. This does not need to be filed with the Probate Court.
- Accounting: Complete an accounting to know the value of the estate and to know if there are sufficient funds to pay debts and expenses. After all claims are received, pay the decedent's continuing bills. Pay outstanding debts and valid claims on the estate. Ideally, for any of these payments, obtain releases. If there are insufficient assets to pay all debts in full, the debts may need to be paid in order of priority set forth by statute. Make a record of all payments, deposits, and distributions of the estate. This does not need to be filed with the Probate Court.
- Estate Tax Returns: Hire an attorney or an accountant to prepare state and federal estate tax returns, if necessary, given the value of the estate. An accountant may also need to file the decedent's last income tax return and pay taxes.
- Real estate: Record a death certificate against the real estate, if necessary. Obtain an estate tax lien release (by filing a Massachusetts estate tax return if the size of estate necessitates it or preparing an affidavit of no tax due if the estate is below the filing threshold). Notify the assessor to change the address for real estate tax bills.
- Disposition of Assets: After one year from date of death, the Personal Representative will be in a position to distribute the remaining estate assets to the beneficiaries of the decedent's will.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
