The appointment of a person as a personal representative is a very important one and one that must be understood by all parties involved. It is a great responsibility to serve as an executor or personal representative. When you are deciding about who to put in this role or when you have recently been appointed, you need to know all that is involved in this process and how to proceed. If the decedent left a will, it will identify the person that the decedent wished to serve as their executor. However, just because a person was nominated in a decedent’s will to serve as the executor does not mean that they must accept that nomination. They can turn it down. Regardless of whether the decedent left a will, the first step in being formally appointed personal representative is filing a petition with the Probate Court that has jurisdiction over the estate under Ala. Code § 43-8-162. For example, if the decedent was a resident of Mobile, the petition would need to be field at the Probate Court in Mobile County Probate Court.
Understanding the Role of Executor
An executor is responsible for handling the estate in the best interests of the estate and its beneficiaries. Note that the term executor and personal representative are essentially the same. An executor is a type of personal representative. If the person was nominated in the decedent’s will, they are called an executor. If they were not nominated in the will, they are called an administrator. Both an executor and an administrator are personal representatives.
The duties of a personal representative can vary based on the circumstances, the size of the estate and the complexity of issues in the case. The court can limit the powers of a personal representative and, in some cases, there are actions that the personal representative can take without receiving prior court authorization. Other actions, however, require approval from the court. Those that require prior court authorization includes selling real estate, subdividing or dedicating land, signing leases for greater than one year, entering mineral leases, demolishing improvements or making repairs.
The list of activities that an executor can undertake without previous court authorization include retaining or receiving assets, insuring assets, paying assessments, performing contracts on behalf of the deceased, satisfying any written charitable pledges, allocating expenses to income, holding securities, settling claims, settling with debtors, selling or exercising stock options, paying expenses and taxes, borrowing to protect the estate, abandoning valueless personal property, depositing funds in financial institutions, prosecuting or defending claims, voting on stocks, entering leases that are a maximum of one year long, limiting liability, incorporating a business or continuing and unincorporated business.
When performing any of their responsibilities, a personal representative must do so in a manner that is consistent with their being a fiduciary. The personal representative has a fiduciary obligation to the estate and to the beneficiaries of the case. In the event that a decision is made that did not require prior court authorization but directly goes against this fiduciary duty, the personal representative could be held liable for breach of fiduciary duty. All decisions made on behalf of the personal representative need to be in the best interests of the parties involved.
Typical Actions Under Probate Administration
The executor steps in to close out the affairs of the deceased and handle probate administration. Alabama probate has to remain open for at least six months for creditors to submit claims. This means that no estate can be closed in less than six months. It is usually an 8 to 10 month time frame for an executor to close out simple estates. The administrator needs to gather all of the different assets and debts associated with the estate to be able to properly take care of them and ensure that any remaining assets after the payment of taxes and expenses are distributed to heirs.