Acting as the personal representative for an estate is a big responsibility that comes with legal obligations to the estate and its beneficiaries. Being prepared to act is an important first step.
A personal representative is a person who has authority to manage the estate of a deceased person. If a deceased person has a Will, typically the Will names their personal representative, also known as an “executor”. If a deceased person does not have a Will, then a person with legal priority to act can apply to court to be the personal representative of the estate.
A personal representative appointed in a Will has automatic authority and rights to manage the estate upon the death of the deceased person. This right may change if someone challenges the validity of the Will. When there is no Will, a person needs court approval before they have authority to act as the personal representative and manage the estate.
Before taking any steps to act as personal representative, a person should carefully consider the duties and obligations the role requires. This article outlines some key things to know when acting as a personal representative.
Duties of a Personal Representative
A personal representative’s first task is usually to make funeral arrangements. This includes giving instructions to bury or cremate the deceased’s body, depending on the deceased’s wishes. Sometimes the Will sets out the deceased person’s funeral wishes. If there are no funeral wishes, then it is up to the personal representative to make reasonable funeral arrangements.
A personal representative must follow the deceased person’s instructions in their Will and the law when managing the estate. If there is no Will, then the personal representative must act according to provincial laws.
Personal representatives must advise certain people and institutions (such as banks and the CRA) that the deceased has died. They must also identify and locate the beneficiaries of the estate.
Sometimes the personal representative needs a grant of probate or administration to perform their duties. This is a court order confirming the authenticity of the Will (if there is one) and that the personal representative has legal authority to manage the deceased’s estate. A grant is needed if there is no Will, if the deceased was the sole owner of land, or if requested by some institutions such as banks or insurance companies. If a grant of probate or administration is required, the personal representative must apply to the court to get one, either by themselves or with a lawyer’s assistance.
The personal representative must identify, secure, and protect all estate property. This may include arranging for secured storage or insurance policies. Further, the personal representative must safely invest cash assets until the estate is ready to be wound up.
The personal representative must pay all taxes, debts, and estate administration costs from the estate before distributing estate property or funds to beneficiaries. A personal representative can be personally liable for any legal debts or claims that are not properly handled.
Once a personal representative has paid all the estate’s financial obligations, they can distribute the estate to the beneficiaries identified in the Will, or if there is no Will, then to beneficiaries who have inheritance rights by provincial law.
Personal representatives must report on the estate’s finances to beneficiaries. This means they must keep track of all expenses, invoices, and income or investments made.
Pitfalls
Estate administration is not always a simple process. Some estates can take years to resolve. Administering an estate involves committing time and energy, and there is no guarantee how smoothly an estate will progress.
Emotions can run high among the family members and beneficiaries of a deceased person. Criticisms and disputes regarding the administration of the estate can arise. Beneficiaries can put pressure on personal representatives to take short cuts and wrap up an estate quickly to get their inheritance.
Personal representatives can face personal liability for costs and damages if they don’t manage the estate properly according to the law.
Even once an estate has wrapped up, personal representatives may have to hold property in trust for beneficiaries who are still minors. In this case, the personal representative acts as a trustee – holding, investing and managing funds for the minor beneficiary. The personal representative can release money to that beneficiary once they reach the certain age specified in the Will, or if there is no Will, when the beneficiary reaches the age of majority.
Tools and Resources
Personal representatives don’t have to face the daunting task of administering an estate alone. There are many tools, resources, and professional advisors that can help make the process easier.
Lawyers can:
- give advice about the steps in the administration process
- assist with applying for a grant of probate or administration
- communicate with beneficiaries and distribute money
- help a personal representative manage the estate properly and avoid liability
Personal representatives can hire other professional agents to assist with particular administration tasks, such as selling estate property or managing revenue and expenses. For example, accountants can assist with tax filings for the deceased person and the estate. Accountants or bookkeepers can help track estate expenses and prepare financial reports for beneficiaries.
For cautious personal representatives, liability insurance policies can provide peace of mind and provide coverage for inadvertent mistakes.
Compensation
The good news is that personal representatives can be compensated for all of their time and efforts. Compensation may be set in a Will, agreed to by beneficiaries, or determined by the court. Personal representatives are also entitled to be reimbursed for any out-of-pocket costs, such as mileage, travel, and parking expenses.
What to Do If You are Appointed or Asked
If you are appointed in a Will or are asked to step up and act as a personal representative, it’s important to take the following steps.
- Stop and consider the circumstances.
Before you take any steps to act, consider the time commitments, work, and risks that come with being a personal representative. You are never obligated to act as someone’s personal representative even if you are appointed in a Will. - Seek legal advice
Talk to a lawyer. They can give you advice and help you decide if you want to act as a personal representative.
Acting as a personal representative can seem like a daunting task. However, with the right information, tools, and professional help, administering the estate can be a smoother process.
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DISCLAIMER The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
About Sherry D. Simons
