Idaho Estate Planning Coronavirus and Being Named as a Personal Representative
By Lane V. Erickson, Idaho Estate Planning Attorney
No one could have predicted the affect the Coronavirus pandemic would have on the world, the economy, and on our personal lives. With nearly every populated area being affected, there is no certainty about who will and who will not contract the virus. For those who do become ill from the virus, there is no certainty as to the severity of that illness or whether it will result in death. While it first appeared to be a virus that affected only the elderly and those who had compromised immunities, the virus has now been seen to aggressively attack individuals on a random basis regardless of age or health.
Because of this, there has never been a more pertinent time to make sure that you have an effective written estate plan in place to protect yourself while you are alive and to provide for your family and loved ones if you were to die. Additionally, it’s possible that you could be named as a personal representative in someone else’s written estate plan. The purpose of this article is to talk about the things that you should be aware of if you are appointed or named as a personal representative for someone else.
Even a quick glance through our free Estate Planning Questionnaire, shows the different appointments that need to be made as part of a regular and basic estate plan. In fact, anyone who is creating a written estate plan that would include a last will and testament, a durable power of attorney, a living will, and a power of attorney for health care will be naming or listing individuals who will be acting in several fiduciary capacities for them. To say it more simply, anyone who has a written estate plan is going to be asking someone else to help them do things.
One of the appointments in a written estate plan is being named as a personal representative. This is the person who takes care of an individual’s estate when that person passes away. The personal representative receives Court authority through a written appointment from the Court to protect and preserve all of the estate property. This person also has the authority to dispose of the property by distributing it to whoever it’s supposed to go to, as well as dealing with and compromising debts with creditors and with anyone else who makes a claim against the estate.
Keep in mind that a person cannot be forced to be a personal representative. Any person who is nominated in a written Will can decline that appointment. For this reason, it’s important that you talk with the individuals you are thinking of naming to make sure that they are willing to do this for you.Is the Estate Complex or Simple?
If you have been named as a personal representative in another person’s written Will, the first question you should ask is whether the estate will be complex or simple. This could have an impact on whether you decide to accept the nomination and act as the personal representative or whether you decline that nomination.
Simple estates usually include all the basic things that normal people have which would be a home, some bank accounts, and some basic debts. A more complex estate would include several pieces of real estate, potentially some business ownership interests, and possibly some investments as well.
Once you know whether it will be a simple estate or a more complex estate that you are in charge of, you can make a decision about whether you want to accept the appointment or not. Keep in mind that even if it is a complex estate, you have the ability to hire certain professionals to help you complete the tasks that need to be done in administering the estate. This means you can hire lawyers, and accountants, business appraisers, Realtors, and any other types or kinds of professionals that you might need to help you effectively administer the estate.What is the Time Commitment?
Once you know whether the estate is simple or complex you’ll also have a pretty good idea of the time commitment involved in administering the estate. It will certainly be a much easier administration and a lot less time involved if the individual has a simple home and bank account. Alternatively, if the person owns multiple properties, has several and other investments or business interests, it could take much more time to administer the estate effectively.
It’s possible that you could be working a full-time job at the same time you are trying to act as a personal representative. It’s also possible that because of this you may not have the time needed to complete the administration of the estate effectively. These are all the things that you should be considering if you have been nominated or named as a personal representative for another individual’s estate.What are Your Duties and Responsibilities?
It’s also important that you understand what your duties of responsibilities are as a personal representative. Stated simply, you are required to protect and preserve the property of the estate. This means that you have to take possession of real property such as a home. It also means that you need to take over bank accounts and investment accounts as well. You are also required to reach out and to work with known creditors to take care of any debts that are owed by the estate. You are also required to publish notice to unknown creditors who would then be given an opportunity to make claims against the estate.
As the personal representative you would also be reviewing and analyzing any claims that are made against the estate to determine whether they are legitimate or not. Finally, you would be required to make distributions to whoever the decedent named as their beneficiaries in their written Will.
Once all the debts have been taken care of and all the distributions have been made as directed, the personal representative needs to “close” the estate. All of this requires several specific documents to be filed with a court and to be served or provided to the beneficiaries, the creditors, and any other person who is entitled to receive notice.Will You Get Paid?
The next question I’m usually asked by a person who’s been nominated as a personal representative is whether they will get paid for what they do. The short answer is yes.
Sometimes the person who created the Will puts a provision in the Will about how much the Personal Representative will be paid for accepting the appointment. Sometimes the person who’s appointed is already a beneficiary of the estate. If they are the only beneficiary of the estate, then it really doesn’t matter whether they get paid as a personal representative or not. However, if they are one of several beneficiaries, they may want to be paid as a personal representative first then receive their share of the distribution from the estate after that.
Idaho Code § 15-3-719 controls how the compensation of a personal representative works. According to this statute “a personal representative is entitled to reasonable compensation for his services. If a will provides for compensation of the personal representative and there is no contract with the decedent regarding compensation, he may renounce the provision before qualifying and be entitled to reasonable compensation. A personal representative may also renounce his right to all or any part of the compensation.”
Everyone always asks me what “reasonable compensation” means. The Courts have not clearly defined what this means. However, the Courts usually allow an hourly rate to be assessed. Personally, I’ve seen hourly rates go all the way up to $25 an hour that have been approved by a Court.
If because of the Coronavirus, or any other reason, you had been nominated or named in another person’s written estate plan to act as their personal representative, don’t panic. We can help. We have guided thousands of individuals named as a personal representative through the probate process, and we are confident that we can help you too!Enlist an Idaho Estate Planning Attorney to Help You
Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a free consultation. You can also email us directly at firstname.lastname@example.org or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho estate planning problems.