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How much liability does an estate’s personal representative risk?

On Behalf of | May 9, 2024 | Probate, Trust & Estate Administration |

Some people agree to serve as the personal representative of an estate when a loved one asks. Individuals planning their estates often turn to people whom they trust and respect to carry out their last wishes after they die. Other times, an individual may suddenly pass without advanced planning, or the personal representative they selected is incapable or unwilling to take on the responsibility of estate administration. The courts may appoint someone if the decedent did not.

Whether someone previously agreed to the role or accepted it out of necessity after someone’s death, they need to be aware of the potential liability that could come from estate administration. What risks does someone accept when they oversee probate proceedings?

Financial liability

The most pressing concern for an estate representative is the possibility of having personal financial liability for certain estate obligations. Someone who accepts the role of personal representative does not automatically become responsible for the taxes or debts owed by the decedent.

However, any mistakes made during estate administration could lead to personal liability. The failure to file tax returns or properly communicate with creditors could lead to personal liability. So could the inappropriate distribution of estate resources. If the personal representative transfers financial accounts, a vehicle or other valuable assets to beneficiaries without first covering taxes and debts, they could be at risk of personal financial liability for the amounts owed by the estate.

Personal challenges

The other risks related to estate administration are largely personal. People often need to sacrifice their free time to oversee probate proceedings. They may need to take time off of work to attend court and may need to devote many hours to securing resources, communicating with interested parties and fulfilling the obligations of the deceased.

The duties inherent in estate administration can also potentially affect someone’s relationships. Family members may try to leverage their relationship with the personal representative to gain favorable treatment. They may resent someone’s strict adherence to probate rules and estate planning paperwork. Personal representatives can also find themselves caught in the middle when two or more beneficiaries start arguing over the validity of the estate or the distribution of the decedent’s resources. It can take quite some time for family relationships to fully recover from the stress generated by someone’s estate.

Typically, estate resources can help cover the cost of legal representation during estate administration, which can be very useful for a personal representative. As such, learning about the liability inspired by estate administration and the types of support available can be beneficial for those taking on this responsibility after someone’s death.