Are you about to qualify as a personal representative (executor or administrator) of an estate for a decedent who died in Virginia? If so, do you know that, under Virginia law, you are considered to be a “fiduciary” once you become the estate’s personal representative? Do you know that you will have fiduciary duties toward the beneficiaries of the estate? Before you qualify, you should be asking yourself some fundamental questions.
Individuals who are about to qualify as executor or administrator of an estate should carefully consider obtaining legal counsel before taking such a step. Familiarity with the obligations and liabilities of the position should be part of that determination. If you are considering to be appointed a fiduciary, you would do well to remember that the position often requires time, care, and the application of skills with people and numbers. For example, you may be faced with navigating complex legal documents, transferring an array of different property interests, handling requests affecting the rights of and demands by individual beneficiaries, dealing with institutional charitable beneficiaries, and working through claims made by creditors, whether now known or unknown.
You will also have inventory and certain accounting obligations to the Office of the Commissioner of Accounts. The Office of your local Commissioner of Accounts serves as the arm of the local county circuit court under Virginia’s court-supervised probate process. In addition, there are strictures relating to Internal Revenue Service and state taxing authorities. You may be required timely to file state and federal tax returns, such as the decedent’s final income tax return, the estate’s federal and state income tax returns, and possibly an estate tax return. With these obligations come deadlines that you must be prepared to meet.
In considering whether to qualify as personal representative of an estate, a major consideration should be whether the estate’s debts and liabilities exceed the estate’s assets. Insolvent estates can be especially difficult to administer. Consider whether you should assume the obligations of becoming a personal representative of an insolvent estate before you are appointed. Once appointed as the personal representative, resignation generally requires obtaining permission from the court.
If you have counsel, question your lawyer whether serving as executor or administrator is right for you. If you do not have counsel, or need a second opinion, you should seek out an experienced probate attorney before making a decision to assume significant legal obligations on behalf of other individuals, usually beneficiaries whose interests you must protect. In short, when it comes to qualifying as personal representative of an estate, look before you leap.