Managing a Loved One's Estate? Understanding the Role of a Personal Representative

While it may seem like a kind gesture to be selected as a friend or family member's personal representative in a will or other estate documents, this role comes with serious considerations and obligations. Accepting this role requires a clear understanding of how to execute the duties of a representative adequately.

We have provided a high-level overview of the requirements and responsibilities of a personal representative in this article to help existing or potential representatives navigate the considerations involved in accepting the role.

Who is the "Personal Representative"?

The term "personal representative" is quite broad and often confused with other terms. In simple terms, the personal representative is the person appointed as executor of a will or trustee of the estate of someone who has died.

Understanding the Assets

Because the testator's will defines the executor's roles and responsibilities, the extent of their obligation can vary widely depending on the will's complexity. For example, if the testator has extensive assets in stocks and bonds and the executor is unfamiliar with such assets, they may not feel comfortable or even capable of ensuring those assets are adequately distributed.

As another example, a testator may name multiple persons as personal representatives. In these cases, the burden is shared among various parties, which can overcome the daunting time, expertise, and energy requirements of properly administering an estate. From a practical standpoint, even parties who are not named as personal representatives, such as family members and friends, may be able to assist in the distribution of the estate. That said, if there are strained relations between representatives and/or beneficiaries, the process is likely to be complex and time-consuming.

Similarly, in the event that conflicts of interest arise between the personal representative and a beneficiary, it may be simplest for a potential executor to forgo the role. Where a conflict of interest arises, it may create conflicts among beneficiaries and distract from the primary goal: administering the estate in accordance with the testator's wishes.

For the above reasons, a potential administrator of the estate needs to have frank conversations with the testator about the testator's expectations and the contents of the will.

Your Duties

The Estate Administration Act, SA 2014 c E-12.5 puts general duties that all executors are held to:

  1. They must execute their role as personal representative honestly and in good faith;
  2. They must execute their role as personal representative according to the intentions within the will; and
  3. They must execute their role as personal representative with the "care, diligence and skill" or a person of ordinary prudence would do where a fiduciary relationship exists; and
  4. They must distribute the estate as soon as practicable.

These duties are more qualitative rather than quantitative. However, courts generally expect a personal representative to ensure that the estate is distributed within one year of the testator's death. While a year may seem like a long time, it often takes months to release the testator's property, even for the simplest will. It takes even more time while the parties decide how real and personal property is to be dealt with amongst themselves. Practically speaking, the process is often naturally accompanied by a grieving process for beneficiaries, which may impede the timely disbursement of estate property. For these reasons, the personal representative must be prepared to invest significant time and effort within a limited period following the testator's death.

Liability

If the personal representative is unable to fulfill their obligations, they may be personally liable for such a failure. The Estates Administration Act imposes liability on multiple fronts, increasing the personal representative's exposure to risk. This is an important consideration: the personal representative must not only complete their duties in a timely manner, but must also do so with a sufficient level of care. Importantly, even if the personal representative has the assistance of non-representatives in the administration of the estate, liability may still rest with the personal representative for any impropriety of the estate's distribution. For this reason, the personal representative should only work with other parties whom they trust will perform the tasks adequately.

Compensation

Executors are entitled to be compensated for their role in the administration of the estate. But depending on the size and complexity of the estate, the amounts may not be of sufficient compensation for the work provided. This is even more so when the estate may be subject to costly litigation that could quickly drain its value, leaving less for the parties and the executors.

Conclusion

While a testator's request for someone to act as their personal representative may seem flattering, it is nonetheless a significant undertaking and should not be accepted until the person truly understands the nature of the task. The personal representative must have a firm understanding of the testator's assets, how they are to be distributed, and any potential conflicts between beneficiaries that may arise along the way. A personal representative must also perform their duties competently and promptly; if the personal representative is unable to invest the necessary time to fulfill these duties, they may be liable to the estate and face high costs awards against them.

Do not hesitate to reach out to one of our McLennan Ross lawyers in the Estates group for more information and help with your estate planning.