We have had many questions about the role of a Personal Representative (PR) when performing a Last Will and Testament. A PR is appointed to execute and administer a deceased person’s Last Will and Testament and assumes a legal fiduciary duty to the estate’s beneficiaries, meaning they must act in the beneficiaries’ best interests.
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While most estates are usually normal and easy to follow, there can be situations where the estate is complicated/disorganized, leading to a confusing mess of information. If you’re in the PR role and are involved in a complicated estate plan, these tips can help you better understand the process the PR undergoes to benefit the wishes of the deceased:
What is the Probate Process?
Probate is a court-supervised process where a deceased person’s estate is administered. A PR needs to understand that the process will take at least six months in the state of Alabama. However, it could take much longer in more complex cases or situations where a Will is challenged. The Probate process typically consists of the following steps:
- Opening of the Estate: Here, the court will validate the deceased person’s Will and grant the Personal Representative Letters of Testamentary, which is the legal authorization for the PR to perform their duties.
- Collection and Inventory of Estate Assets: The PR gathers the deceased person’s assets and conducts an inventory to determine their fair market value (This can be the most time-consuming portion of the process.. See below in “Know Where to Look for Assets”).
- Satisfying the Decedent’s Financial Obligations: Creditors must be notified of the deceased person’s death so they can file any claims against the estate for payment. Except for secured creditors, creditors have six months to file claims after notice.
- Transferring of Assets: This step involves the distribution of estate assets to the rightful heirs.
- Closing of the Estate: Once the payment of any final taxes is complete (including income taxes for the year of the deceased person’s death and taxes incurred during estate administration), the PR can petition the court to settle/close the estate.
To get a more in-depth review of the probate process in Alabama, click here.
Where does the PR go to Identify the Assets to be Distributed?
Looking for the deceased assets can be tricky to navigate for a Personal Representative. Contrary to what you might think, there is no central database where a PR can find all assets for a deceased person. To help locate assets, the PR may request or research the following:
- Seek Tax Returns: Most people keep their tax returns for at least three years, which should offer a wealth of information regarding investment accounts, property, etc.
- Search Mail: More and more people are relying on digital statements; however, there are still several who prefer to receive physical statements in the mail. With this in mind, it does not hurt to sort through any physical documentation the deceased may have stored.
- Search Public Records/Courthouse: If a deceased person owned real property, this is a good place to look.
- Petition Financial Institutions: After the granting of Letters of Testamentary by the Probate Court, a PR may petition brokerage firms, banks, insurance companies, etc., for any property that may be custodied at those financial institutions.
The responsibility of being a Personal Representative can be overwhelming, and if you find yourself in this position, seek the advice of an attorney or financial advisor to help you navigate the process.
Marshall Clay CFP, J.D., is a Partner and Senior Advisor at The Welch Group, LLC, specializing in providing Fee-Only investment management and financial advice to families throughout the United States. Marshall is a graduate of the United States Military Academy in West Point, New York, the Cumberland School of Law in Birmingham, Alabama, and is a CERTIFIED FINANCIAL PLANNER™. In addition, Marshall is a frequent guest on local television stations as an expert on various financial planning matters.
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