Serving as the personal representative of an estate could be the result of accepting that responsibility or a decree by the California probate courts. In either situation, you will have to fulfill certain responsibilities in your role as the representative of an estate.
You may not realize that there are actually financial risks to you as an individual when you agree to administer someone’s estate. What two financial obligations could become your responsibility?
Unpaid taxes
It is often the responsibility of the executor of an estate to file certain tax returns and use estate resources to pay an individual’s income taxes and estate taxes. Especially if you sell estate assets, retaining enough funds for taxes is a crucial step.
In a situation where the representative of an estate distributes resources to beneficiaries but fails to pay taxes, they could end up personally responsible for the amount still due at the end of the probate process.
Unpaid debts
Every creditor from Medi-Cal to credit card companies can bring financial claims against the estate in probate court. You aren’t responsible for debts that exceed the value of the overall estate.
However, you will be responsible if you distribute the state property without first paying debts as the law requires. You could also have liability for debts when you fail to provide creditors with the required notice of estate administration.
You can typically expect the estate itself to cover the costs of legal representation to help you handle probate proceedings appropriately. Getting professional support during estate administration can help you avoid the mistakes that could lead to expensive personal liability
