Wearing Different Hats: Becoming a Personal Representative or Trustee
If you are the oldest child, considered to be “the most responsible,” “always so organized,” or a trustworthy friend, you may be named or may have been named as an executor in your parent’s or someone else’s will. And, after the loss of a loved one, this appointment may come as a surprise and leave you with a large undertaking during a time of grief.
In Colorado, we call executors “personal representatives.” Personal representatives are fiduciaries charged with the duty of administering the deceased’s estate. This means:
- Collecting the assets, like insurance proceeds, accounts, personal property, and real estate; - Managing the assets during probate and until distribution, such as taking care of the real estate; - Paying the bills of the estate that are not in dispute; - Making distributions to the heirs or beneficiaries of the estate; and finally, - Closing the estate after all of the above has been completed.
This duty lasts a minimum of six months (if probate is needed) and sometimes much longer if there are assets that take some time to liquidate or if there is any type of dispute among the beneficiaries. When the deceased person has estate planning documents other than a will, such as a trust, the personal representative may also be named as the trustee. And as is often the case, that same person was, during the deceased person’s life, acting as a different fiduciary. The same individual may also serve as an agent under a power of attorney (granting the agent authority as described in a document), or a court-appointed Conservator (responsible for handling the protected person’s personal finances).
If the deceased had a trust that became irrevocable upon death and a will, your duties as trustee and personal representative may seem duplicative. However, a trustee is a distinct fiduciary responsible for handling only assets in the trust and all trust transactions. Most often, a person’s will provides that upon death, all of the deceased’s assets go into the trust, which simplifies distribution. Sometimes there are assets that pass outside the will that are not trust assets. If the personal representative and the trustee are different persons, those two will need to work together to administer the estate and trust.
If named as the personal representative or the trustee, there are documents that you should look for after the death of your loved one, such as:
- An original will, a copy of the trust agreement(s); - Deeds, leases, titles, mortgages; - Safe deposit or safe keys; - Life insurance policies or statements, stock and bond certificates and account statements; - IRA, retirement, pension, annuity statements; - Nuptial agreements, divorce or other litigation papers; - LLC or corporate agreements; - Unpaid bills, promissory notes (receivable and payable); - Income tax and gift tax returns for the past couple of years; - Military records, papers regarding professional societies that may offer benefits upon death; and - Checkbooks, deposit slips, bank statements.
Collecting these assets may take more time than you anticipate. And before you are ready to make distributions, there may be complications, such as real estate that goes to several descendants together, property that is leased, or an heir who owes the estate money. The list can go on and on.
Most personal representatives and trustees would do well by engaging an attorney to guide them in accomplishing their duties under Colorado (or Utah) law. We would be honored to assist you with this process during a difficult time in your family’s life.