Estate Planning | Handling Estate Cash Responsibly

As I discussed in my prior post, a Personal Representative must properly manage the estate assets.  The court and the beneficiaries of the estate will all be paying attention to make sure that Personal Representative is acting in the best interest of the estate.  The Personal Representative must act as a fiduciary and handle estate assets responsibly.  If he or she fails to do so, there is strong possibility the the Personal Representative could be removed.

Some common things the personal representative must manage are:

• Depositing estate funds in a bank;
• Collecting upon indebtedness;
• Investing estate assets and funds of the estate in a productive manner
• Performing on existing contracts of the decedent;
• Maintaining actions for embezzlement or conversion if necessary;
• Selling estate assets and retaining money from said sale (e.g. an estate sale);
• Otherwise getting rid of unproductive estate property;
• Opening up a estate administration if necessary;
• Other actions which benefit the estate, its creditors, and the beneficiaries.

Furthermore, as local estate planning lawyer, I cannot stress enough how important it is that the Personal Representative of the estate be very serious about their undertaking.  He or she will have legally enforceable responsibilities and duties, such as those I have listed above.  All of those duties must be done as a fiduciary, which means the Personal Representative cannot engage in self-dealing or otherwise personally dipping into the estate assets.

Many Personal Representatives of estates have not only been removed but they have also been sued civilly and criminally for unlawful removal of estate assets for their own benefit.  That means no personal loans, not failure to prosecute a lawsuit or otherwise fail to act in the best interest of the estate.

Personal representatives and their estate planning lawyer should also make sure that they place the proper restrictions on any and all estate accounts.  This includes retirement, insurance, bank, or other estate accounts.  Many times, an attorney will advise the Personal Representative to open a separate bank account with a local bank.  The account will be but in the name of the Personal Representative and be labeled an estate bank account.  This allows the attorney and the Personal Representative – as well as any suspecting beneficiaries – to know where the estate money is located and it insures a precise record is kept.

There are many things that a retirement planning lawyer and the Personal Representative can do to act in the best interest of the estate. Obviously, the parties need to ensure that they do so.

For further information about estate planning and handling estate cash responsibly, please contact Joseph M. Flanders at flanderslawfirm.com.