10 Things to Know as a New Personal Representative
If someone close to you has died and named you in their will, or if you have stepped forward to handle the estate of a family member who left no will, you are about to become a “personal representative.” That is Colorado’s word for an executor. These are the points we go over with every new personal representative we work with.
1. You have no authority until the court gives it to you. Being named in the will is not enough. Banks, title companies and the county will want to see your “letters,” which the court issues after you are appointed. Until then, keep things safe and secure, but do not sell, spend or give anything away.
2. Your job is to protect the estate, not to please the family. A personal representative is a “fiduciary,” which means you must act in the best interests of the estate and everyone with a claim to it. That duty applies even when the people asking you for things are your own brothers and sisters.
3. Open a separate bank account for the estate. The estate gets its own tax identification number and its own account. Never mix estate money with your own, even for a short time, and keep every receipt.
4. Tell the heirs and beneficiaries. Colorado requires you to send notice of your appointment to the people who inherit under the will (or by law, if there is no will) shortly after you are appointed. It is also the easiest way to keep the family informed and avoid suspicion later.
5. Publish a notice to creditors, then wait. Creditors generally have four months from the first publication to present their claims. Do not hand out the inheritance before that period is over, because a personal representative who distributes too early can end up paying the estate’s debts out of their own pocket.
6. Make a list of everything. You need to know what the person owned and what it was worth at death: real estate, accounts, vehicles, retirement accounts, valuables and debts. Some of these will pass outside the estate by beneficiary designation, and part of your job is sorting out which is which.
7. Not every debt gets paid first. Colorado sets an order for paying claims (e.g., funeral costs and the expenses of the estate come before ordinary credit card debt). If the estate cannot pay everyone, the order matters.
8. Taxes do not stop at death. The person’s final income tax return still has to be filed, and the estate may need to file its own returns. Most estates do not owe federal estate tax; even so, involve a CPA early.
9. You can be paid, and you can get help. A personal representative is entitled to reasonable compensation for their time, and the estate (not you personally) pays for the attorney, CPA and other help you need to do the job properly.
10. Keep the family informed. Most estate disputes start with silence. A short update every month or two (e.g., what has been done, what is left and when distributions are expected) prevents most of the trouble we see.
This page is general information, not legal advice. Every estate is different, and a personal representative should speak with an attorney before taking action.
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