In a recent post, we began discussing how even though being named the personal representative -- or executor -- of a family member or friend's estate may initially seem like a great honor, the novelty can rapidly wear off as the weeks, months and even years pass.
Indeed, one reality that can rapidly sour a person's mindset toward being appointed a personal representative is the realization that they could potentially be held personally liable for making unintentional errors.
As frightening as this proposition can seem, experts indicate that there are some simple steps that can be taken by personal representatives to both avoid these errors and insulate themselves from potential legal action.
While the idea of paying the cable, credit cards or other bills of the deceased as fast as possible in order to avoid late notices and retain some semblance of order during chaotic times is understandably tempting, experts indicate that this may prove problematic.
That's because these types of expenses are actually much further down the so-called list of payment priorities. Indeed, things like the cable bill and other household debts actually take a backseat as far as the law is concerned to matters like federal and state tax debt, and funeral expenses.
In fact, if the personal representative is too overzealous in their efforts to pay down lower class creditor claims such that there are insufficient funds remaining in the estate to cover higher priority debts, they may be held personally liable for a breach of fiduciary duty.
As counterintuitive and frightening as all this may sound, experts indicate that the simple step of speaking with an estate planning/estate administration attorney can go a long way toward eliminating this risk. That's because he or she can help the personal representative understand payment priorities, assess the liabilities of the deceased and proceed accordingly.
We will continue this discussion in future posts.
To learn more about estate administration -- including your rights and responsibilities as a personal representative -- please consider speaking with an experienced and skilled legal representative as soon as possible.