When someone passes away, the distribution of their estate may be carried out by a personal representative (also referred to as the executor). This role carries significant responsibility, and while the personal representative must follow the directions laid out in the deceased person’s will, there are situations in which they have discretion. Understanding when and how this discretion can be used is crucial for both the personal representative and the beneficiaries of the estate (i.e. the people who are inheriting something from the deceased person, based on the will).
The Role of the Personal Representative
The personal representative’s primary duty is to carry out the testator’s will’s instructions. (A testator is the name for someone who makes a will.). This includes managing the estate’s assets, paying debts and taxes, and distributing property to beneficiaries. However, not all wills are clear on every detail. The personal representative may encounter situations where they must use discretion to determine the best course of action.
Discretionary Powers of a Personal Representative
While a personal representative must follow the will’s instructions, many wills include provisions that grant the personal representative a certain level of discretion. Examples include:
- Deciding When to Sell Property: A will might allow the personal representative to determine when or whether to sell certain assets, such as real estate or valuable items, depending on market conditions or other factors.
- Converting Assets to Cash: In some cases, the personal representative may need to decide whether to liquidate assets before distributing them to beneficiaries. For instance, if there are illiquid assets like a retirement account, the personal representative might convert these into cash to make the distribution easier or fairer for all involved.
What Happens If the Will Is Unclear and What Could Lead to Removal of a Personal Representative?
A personal representative may exercise discretion when the will does not explicitly address a particular situation or is unclear. If a personal representative is uncertain about how to proceed, they can seek clarification from the court. A personal representative holds a fiduciary duty to the estate, meaning they must act in the best interests of the beneficiaries and adhere to the instructions of the will. If a personal representative breaches this duty, they could be subject to removal. Some examples of misconduct include:
- Acting Against the Estate’s Interests: If the personal representative makes decisions that go against the clear intentions of the will, such as selling property prematurely or distributing assets in a way that deviates from the testator’s wishes.
- Self-Dealing or Conflict of Interest: If the personal representative acts in their own interest rather than for the estate, they can be held liable.
- Withholding an Intended Gift: If the personal representative intentionally withholds an intended gift from a beneficiary or manipulates the distribution in a harmful way to a specific individual, this could constitute a breach of fiduciary duty.
Conclusion
While a personal representative must generally follow the will, there are circumstances in which they can exercise discretion. If the personal representative acts in good faith and within the scope of their authority, the court is likely to support their decisions. If there are ever any concerns with a will, we always advise seeking the advice of an experienced attorney.
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