Lawsuits Against Personal Representatives
The personal representative of an estate is charged with many important tasks, such as safekeeping estate assets and paying off debts. Because this person has such control over estate assets, the opportunity for them to steal or waste assets is very great. At Millhorn Elder Law Group, we receive many questions about whether a personal representative can be sued. The answer is yes, depending on the circumstances.
Duties a Personal Representative Owes
The law imposes many duties on a personal representative, so each representative should be aware of them before accepting the assignment. In particular, the law requires the following:
- Duty of Prudent Administration. This duty requires that the personal representative make safe decisions regarding estate assets. For example, the estate might contain real estate, and the personal representative should have the property insured for loss. If there are stocks in the estate, then the personal representative should preserve the value by cashing out or moving into less volatile investments.
- Duty of Loyalty. A personal representative must act in the best interest of the people who will inherit, not themselves. For example, a personal representative shouldn’t sell estate assets to her sister at a discount.
- Duty of Impartiality. The personal representative cannot show favorites between beneficiaries. Of course, the will does not treat everyone equally—it might leave one child $30,000 and another child $2,000. But the personal representative cannot show favoritism that is not dictated by the will.
These duties are often difficult to fully appreciate, especially for people who have never been in charge of large assets before. If you have been named as a personal representative, you should seek help from a probate attorney to ensure you fulfill all of your duties.
The following are common situations where a personal representative is at risk of breaching their duties. If you notice any of them, you should contact a probate attorney:
- The estate lacks sufficient cash to pay off debts. In this situation, the personal representative might need to sell assets to raise the cash. Unfortunately, some beneficiary might have been waiting to inherit the assets that get sold. Personal representatives are in danger of breaching their duty of impartiality in these situations.
- The estate lacks sufficient cash to make specific bequests. For example, a will might leave $25,000 in cash to two people. If there is only $40,000, the personal representative could breach a duty of impartiality if they give one person the full $25,000 but the other only $15,000.
- The personal representative uses estate assets for themselves. For example, they might stay at a piece of property or start using the vehicle the deceased owned.
- The personal representative buys estate assets or sells them to a family member, friend, or business acquaintance. In these situations, there is a serious risk that the personal representative is benefiting themselves, not the beneficiaries.
- The personal representative is taking too long. Of course, everyone wishes probate would move faster. But if you legitimately think the personal representative is dragging his feet, you can file a motion to compel administration.
Every case is unique, and it is hard to say whether a personal representative is satisfying or breaching their duties. If you have a question about an administration, contact a probate attorney at the Millhorn Elder Law Planning Group in The Villages. All initial consultations are free.