A very important part of the probate process is analyzing personal representatives and determining if they are well-suited for the role. Personal representatives’ have a major role in the probate process and estate administration process, so it is absolutely vital that they know and understand their responsibilities moving forward. A Maryland probate lawyer can explain and guide people through the sometimes stressful process of probate. Call today to speak with an attorney for more information.
Choosing Personal Representatives
The most important consideration is to determine whether a personal representative is qualified to serve and if they are barred from serving for any reason. There are some limitations to who can serve as a personal representative. A personal representative must be over the age of 18. They must not have also committed a serious crime and they must have the required capacity. A personal representative must also be willing and able to serve.
The next important consideration is whether the personal representative is the best choice for the job. If a personal representative has not been nominated by a decedent in the last will and testament, it’s important to determine the order of priority to serve as proscribed by Maryland law.
Responsibilities of Personal Representatives in Maryland
The required court filings necessary for a personal representative to file are dependent on the nature of the administration. For example, a small estate may not require any additional filings, while a regular administration may require the filing of an Inventory, and periodic accountings.
Generally, after a personal representative is appointed, their main tasks include marshaling the assets of the estate, paying any legally enforceable debts and making distribution either pursuant to the terms of the last will and testament or pursuant to terms of Maryland intestacy.
The fiduciary responsibilities of a personal representative are usually outlined in the last will and testament. If not, by default, someone in their fiduciary capacity has an obligation to maintain the assets in the same prudence that they would use for their own assets. A fiduciary means that somebody is controlling the assets but for the benefit of somebody else. Serving as a fiduciary can be difficult. A Maryland probate lawyer can help guide you through the process and advise you of your obligations.
A common misconception is that the personal representative may use estate assets as his or her own or control where the assets are distributed. Although a fiduciary has access to estate accounts, he or she is required to use them for the expenses and debts of the estate only.
Items Personal Representatives Can Appraise Themselves
A personal representative can provide the date of death value for assets such as bank accounts and stock holdings. The personal representative cannot value real estate, tangible personal property, or closely held businesses.
An inventory is used to provide a date of death value of all of the assets in the probate estate. The rules for valuing assets as of the day of death are dependent on the nature of the asset itself. For example, real estate is valued by an appraiser, while a personal representative can value bank accounts or stock holdings independently. The inventory will list all of the assets that the decedent owned in his or her sole name on the date of death that do not have a joint owner or beneficiary designation.
Failure to Fulfill Responsibilities
If a personal representative fails to meet his or her fiduciary obligations, the court may issue a show cause order requiring the personal representative to attend a hearing before the court. The court will determine at the hearing if the personal representative’s breach was serious enough to result in removal, and whether a successor personal representative should be appointed.
If Personal Representative Moves to Another State
The personal representative does not need to be physically located in the state of Maryland to be a personal representative or to act efficiently in the capacity as a personal representative. A Maryland probate attorney can provide assistance with completing any Maryland base activities, such as meeting realtors at a decedent’s real estate or scheduling an estate clean out.
A non-resident personal representative does not necessarily affect the administration of the Maryland estate other than it may then be required to file an appointment of a resident agent form.
Getting Paid As a Personal Representative in Maryland Probate Cases
A personal representative can request a commission for his or her services. Generally, Maryland has a maximum limit on the amount of commissions that can be taken from an estate. Some counties have chosen to assess both attorneys’ fees and personal representative’s commissions together when applying the suggested maximum limit. A personal representative may not take commissions from estate assets without a court order or the filing of written consents from all of the residuary beneficiaries of an estate. Personal representative’s commissions are income taxable to the individual and are reported on the personal representative’s personal income tax returns.
This is usually discussed on a case-by-case basis with an attorney depending on the nature and the value of estate and the work that has been performed by the personal representative and the attorney.
Refusal of Personal Representative Appointment
If a personal representative has passed away during the course of the administration, the nominated successor personal representative in the last will and testament or the next person in order of priority will petition the court to be appointed.
If the personal representative no longer wants to serve, they may be able to resign. The terms of the decedent’s last will and testament will provide a successor personal representative. In the event of resignation, the personal representative is required to turn over the assets of the estate to the successor personal representative. In the absence of a named successor or when a decedent has died intestate, the law of the state of Maryland provides an order of priority for who may serve as personal representative.
Depending on the type of administration and the stage of the administration process, there may be filings that are required by the successor personal representative such as an inventory, informational report, or accountings.
How a Maryland Probate Lawyer Can Help Personal Representatives
An attorney can help a personal representative in a number of ways. First, the attorney can start by assisting the nominated personal representative prepare the necessary pleadings to be appointed. The attorney can then help with all of the required accountings or final reports and can prepare a complete inventory of the estate assets.
The attorney can also advise on and assist with marshaling the assets and having all of the assets valued. An estate attorney can help prepare any state estate tax or federal estate tax returns. An attorney can assist you by recommending appraisers for real property and tangible personal property. They can also assist you in valuing the stock or determining the date of death values of bank and brokerage accounts. It is best to provide any information you have regarding an asset to an attorney so that they can properly determine the date of death value. An accountant may assist with valuing partnerships, closely-held businesses or family businesses. Determining the date of death value for an asset is unique to the type of asset. It may be helpful to consult with an attorney who is familiar with the valuation. Finally, the attorney can help make a plan for distribution and help to ensure that distribution is made pursuant to the terms of the will or trust or pursuant to the laws of intestacy for the state of Maryland.