APPOINTMENT OF PERSONAL REPRESENTATIVE IN FORMAL PROBATE

The first step in a formal probate proceeding is to file a petition, along with your spouse’s Will (if any), requesting the appointment of one or more persons to serve as personal representative. The petitioning party, which can be any beneficiary or heir, asks the court to appoint the personal representative named in the petition.

A copy of the petition and a notice of hearing must be sent to all “interested parties,” which includes all heirs and beneficiaries named in the Will. In making its determination, the court gives priority to the person named in the Will. If the person named in the Will (if other than the surviving spouse) declines or is unable to serve, the next priority goes to the surviving spouse. Next in line will be children. This priority scheme will also apply if there is no Will.

A hearing will be held to determine whether the person nominated to be personal representative has priority and whether there are any objections to the appointment. Someone with higher priority can appear at the hearing and object to the appointment. Any interested party may object to the appointment, even if the nominated individual has priority, on a showing that the nominated person is not suitable to act as personal representative due to lack of expertise, conflict of interest, or some other valid reason.

Once the court has made its determination, it will issue “letters of authority” which you as personal representative must present as evidence of your authority. It is advisable to order five to ten original copies of the letters of authority since each financial institution will likely request an original copy.

The personal representative represents the estate in all matters including the preparation and filing of all income, gift, and estate tax returns. The personal representative is also charged with gathering and securing the estate’s property, preparing all necessary court filings, paying proper estate expenses and distributing the estate’s property to the named beneficiaries or heirs.

As a personal representative and fiduciary you must use your best efforts; act in the best interest of the estate, and not for your own benefit; protect and preserve the estate’s assets; productively invest the assets of the estate; account for all income and expenses; keep the interested parties informed of the progress of the estate’s business; and ultimately distribute the estate to the beneficiaries named in the Will or to the heirs.

The court may require the estate to purchase a bond to protect the estate and its beneficiaries against any wrongdoing of the personal representative. If a bond is required, the annual premium is paid by the estate. A bond is usually not required where the surviving spouse is appointed as personal representative, especially where the estate will pass entirely to the surviving spouse.

APPOINTMENT OF PERSONAL REPRESENTATIVE IN INFORMAL PROBATE

The procedure for appointing the personal representative in informal probate is the same as it is in formal probate except that there is no court hearing. Instead, the court clerk will simply issue letters of authority appointing the person named on the petition as long as he or she has priority under state law, or the written consent of everyone who has an equal or higher priority. The duties and standard of care of the personal representative are the same in both formal and informal probate.

APPOINTMENT OF TRUSTEE

In a typical revocable trust, the grantor acts as initial trustee. The trust document appoints a successor trustee to act upon the death of the grantor/initial trustee. For the successor trustee’s appointment to become effective, he or she must sign an “Acceptance of Trust.” In the Acceptance of Trust, the successor trustee accepts the appointment and agrees to faithfully execute the duties of trustee. No court filing is needed.

A trustee is a fiduciary, and must act in the best interests of all beneficiaries. State law typically requires the successor trustee to notify trust beneficiaries (usually within 28 days after signing the Acceptance of Trust) of the grantor’s death and their right to review the trust provisions affecting their interest in the trust. No bond is required unless provided for in the trust document.