Many people worry about how their assets will be handled after they pass away. The appointment of a personal representative, the person responsible for distributing estate assets and handling estate debts, is an important decision that requires serious thought and preparation.
Even if the personal representative is a relative or someone else the person trusted, it's important to have the right legal documents in place to clearly define and establish appropriate personal representative duties.
But sometimes even the best estate planning can’t prevent breaches of fiduciary duties. We’ll discuss what legal action you can take to remove a dishonest personal representative and sue for breach of fiduciary duties.
What is a personal representative of an estate?
A personal representative is a person, or entity, who is appointed to handle the estate of a deceased person, which might involve funeral expenses as well as future dispersal of funds. The personal representative has the power and responsibility to distribute assets, pay debts, and properly manage the estate through the probate process.
The term “personal representative” includes a variety of roles, including:
Why is a personal representative needed when a person dies?
When a person dies, the assets have to go through a court process called probate before they can be distributed to heirs and beneficiaries.
Regardless of whether the person passed with a will, the estate goes through probate. If they had a valid will, the law refers to it as a “testate” estate. If a person were to die without a valid will, it’s called an “intestate” estate.
A personal representative is responsible for managing the estate through probate from the time of the appointment until all the assets are distributed, debts are resolved, and fees are paid.
How is a personal representative appointed?
A personal representative can be appointed in two ways: by a will or by a court.
Appointing a Person Representative Through a Will
The most common way to appoint a personal representative is through a will. A will is a written document, drafted by or on behalf of the testator, stating how property is to be distributed after death. A will ensures that your wishes as to who inherits your estate after you pass away will be honored.
One of the most important provisions in a will concerns the appointment of the personal representative. It designates the representative by name and specifies the representative’s powers and duties. Well-drafted wills also designate a successor personal representative in the event the first appointed personal representative is unable or unwilling to serve.
The will should also set forth the personal representative’s compensation. Their fees can range widely, from hourly rates to fees calculated at 3 to 5 percent of the estate’s value.
Appointing a Person Representative Through the Court
In cases where someone dies without a will, the court will appoint a representative to oversee the estate through probate.
The decedent’s express wishes are followed if there’s a will, but state laws govern who gets what when there’s no will. Each state has its own law that dictates who the legal beneficiaries are (typically limited to spouses and heirs) and their legal share of the estate.
A court could also appoint a personal representative if there’s a need for a successor in the event of incapacitation, death, or the breach of fiduciary duty.
What are the duties of a personal representative?
The duties of a personal representative are either as stated in the will or as specified by state probate laws. In either case, a personal representative’s duties are necessary to take the decedent's estate from start to finish, including:
In addition to administrative duties and responsibilities, personal representatives also owe a fiduciary duty to the estate. That means they have to act in the sole interests of the estate. There can’t be conflicts of interest or actions benefiting certain parties over others or benefiting third parties over the estate.
How can a personal representative be removed?
A personal representative can be removed only by court order. The party seeking to remove the personal representative must be able to show that the personal representative was acting against the estate’s interests, engaged in some wrongdoing, or otherwise breached a fiduciary duty owed to the estate.
What are the legal reasons to remove a personal representative?
Grounds to remove a personal representative typically involve allegations of an intentional breach of fiduciary duties. In other words, the personal representative is accused of engaging in conduct that benefited their own interests or the interests of a beneficiary or third party over the interests of the estate.
Examples of types of intentional breaches of fiduciary duties include fraud and embezzlement.
Sometimes breaches of duty occur even when the personal representative or some other party does not personally gain or benefit from the alleged acts. Those grounds typically involve estate mismanagement or undue delays, such as the failure to provide an accurate account of estate assets, to communicate with beneficiaries, or to pay debts and bills.
A personal representative may also be removed for lack of mental capacity or a conflict of interest so strong that it makes the impartial administration of the estate impossible.
There could also be grounds if it can be shown there was undue influence of an elderly testator in the appointment. For example, if an agent under a power of attorney revised the will to appoint themselves as the personal representative and also listed themselves as the beneficiary of all or most of the assets, a court could find wrongdoing and terminate the appointment.
What is the process to remove a personal representative?
To remove a personal representative of an estate, a petition for removal must be filed with the court. The petition must contain allegations of fact that support one or more legal bases for removal.
The personal representative, as well as all other parties and heirs, will be given time to formally respond in writing to the petition, and the filing party generally will get the last word by filing a reply.
The court will rule on the petition after reading all the filings and hearing oral arguments. All parties and heirs must be given notice of any filings and court dates.
Can personal representatives who breached their duties be punished?
If a court finds that a personal representative has breached fiduciary duties, punishment isn’t just limited to removal. The personal representative could be ordered to pay money damages to compensate for any harm caused. Compensatory damages can include attorney’s fees and other costs that were incurred in bringing the petition for removal.
In severe cases, a court may award punitive damages in addition to compensatory damages as a way to punish the fiduciary for their wrongful conduct. Some states also have statutory damages for improper acts. If the statute calls for double and treble damages, that means the representative has to pay twice or three times the number of compensatory damages.
Get help to change the personal representative of an estate
If an heir or beneficiary or any other party to a probate proceeding feels that the personal representative of an estate is engaged in wrongdoing or has breached their fiduciary duties, there is a remedy available. They can file a petition for removal with specific allegations of breach or misconduct. If the court removes the representative, compensatory and other damages can be awarded.
Different states differ with their laws on removing a personal representative of an estate, so be sure to research what is required where you live. The process can be complicated and lengthy, so it’s essential to understand all the proper steps you need to take and the paperwork you’ll need to file.
Lauren Blair is a lawyer who writes for the insurance site, Clearsurance.com. She has over 25 years of experience in litigation.
