Most people in California understand that upon their death, their property will be distributed to their heirs. If the person has left a will, the property will be distributed pursuant to instructions in the will. If the person dies without a will, the property will be distributed according to California’s laws of intestate succession, that is, statutes that prescribe how a person’s property must be divided among surviving heirs if the decedent has left no will. In either event, the court will appoint a person to manage the estate until the probate proceeding is closed. That person is referred to as a “personal representative” regardless of whether the decedent left a will. The duties of the personal representative, or PR as they are commonly called, are mostly identical regardless of whether the decedent left a will. An understanding of the basic nature of these duties may help promote an understanding of the necessity for preparing a will and estate plan.
The PR duties begin when the court issues Letters of Administration appointing the PR. Once the Letters have been issued, the PR must take possession of the assets that make up the decedent’s estate and to manage and preserve those assets until the estate is closed by order of the court. The PR must keep estate assets separate from his personal accounts and manage the assets with the care of a prudent person dealing with someone else’s property. The PR must be cautious and must not make speculative or risky investments. The PR must give notice of the probate proceeding who can be identified. Once the court approves the inventory and resolves any disputes, the PR can begin to pay the obligations of the estate using estate assets for this purpose. Assets not used to pay debts must be kept in a separate bank account. With the exception of assets used to pay the estate’s obligations, the funds must be kept in interest bearing accounts or investments.
Preparing an inventory
Before a PR can embark upon the duties of administration, the PR must prepare an inventory of all estate assets. The PR must file the inventory within four months after the estate proceeding has begun.
Reporting to the court
The court has overall responsibility for the proper administration if the decedent’s estate, and the PR must report periodically to the court on the estate’s financial condition. In many cases, the PR must obtain the court’s approval of proposed expenses before they are paid. When all debts have been paid, the PR must submit a final accounting to the court. If the court approves the final account, the PR can distribute the assets of the estate to the heirs who are entitled to receive them and the estate can be closed.
Hiring an attorney
A prudent PR may wish to hire an experienced estate attorney to provide advice during the probate administration. The attorneys’ fees can be paid out of estate assets so long as the court approves them.