CHOOSING A PERSONAL REPRESENTATIVE

     Some states call them executors, others, like Florida, call them personal representatives. This person carries out the terms of your Will. The personal representative's first duty is to initiate probate, the formal court process of proving the validity of your will. Unlike a Living Trust which eliminates probate, a will does not, so it is important to choose your personal representative wisely.

     The job of the personal representative is not glamorous. He or she must figure out every asset in your estate and the amount of any debts you owe, must establish a value on stocks, furniture, real estate, automobiles, jewelry and antiques, and if you own your own business, determine its value. The personal representative must collect your assets, pay all debts, taxes and expenses of the estate, and distribute the remaining assets to your beneficiaries according to your wishes and state law. Because your personal representative will need to be available to sign legal documents and appear in court proceedings, it's a good idea to appoint someone who lives in the area, or at least in the same state you live.

     While many states require that the personal representative post a bond to protect the assets of the estate, most people do not require a bond in their wills. A bond is only required when there is some concern that the personal representative will misuse his or her authority and diminish the value of your estate. But the cost of the bond itself can reduce your estate value.

     There are restrictions on who may serve as a personal representative. Florida does not permit a nonresident, non-relative to serve unless that person is a spouse, or related to the spouse. You might choose a trusted friend or relative who is capable of handling financial matters. You can name one of your beneficiaries to serve as personal representative. In fact, most married people name their spouse. Certain trust companies and banks are qualified to act as a personal representative, but they will charge for the service. While all personal representatives are entitled to a fee, friends and relatives usually decline to take one.

     You should ask the person you want to serve as your personal representative in advance and should name an alternate in case your first choice is unable or unwilling to serve. You may choose more than one person to serve as co-personal representatives so they can pool their skills and at the same time, keep an eye on each other. If you fail to prepare a will naming your choice for personal representative, the probate court will choose one for you who may be someone you don't know or, worse, someone you would not want managing your affairs.

     Let's take Esther's case. Esther, a Florida resident, died without a will. She has 3 grown children, Joe, Ann and Ron. Joe, the oldest, was never a part of her life and the last person she wanted handling her estate. She planned to leave everything to Ann and Ron. However, upon learning of Esther's death, Joe applied to the court and, over Ann and Ron's objections, the court appointed Joe as personal representative. Joe took a fee of 3% of Esther's estate to act as personal representative in addition to one-third of the remainder of her estate. This is the exact opposite of what Esther wanted. Had Esther made a will naming Ann or Ron, or both of them, as personal representative of her estate, this could have been avoided and her assets would have been distributed as she intended to Ann and Ron.

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