Administration refers to the process of administering an estate of a deceased person. Administration is not the same as probate, which is the process by which a Will is proved. Administration begins after the probate process is completed (if there is a Will), and an executor or, in the case of an intestate estate, an administrator is appointed. In Georgia, for the purposes of administration, both an executor and administrator are referred to as the estate’s personal representative.
The personal representative has several statutory duties to the estate, though some may be waived either by the Will or by the heirs or beneficiaries. Generally, the personal representative is required to:
- Settle the estate as expeditiously and with as little sacrifice of value as is reasonable under all of the circumstances. This is a general admonishment to treat the estate respectfully and to make all reasonable efforts to complete the process as soon as possible, including paying all debts and making all distributions to beneficiaries or heirs. The court will not permit self-dealing or any other transaction that does not derive the greatest possible benefit to the estate, especially with regard to the sale of estate property.
- Act in the best interests of all persons who are interested in the estate and with due regard for their respective rights. While the personal representative’s highest duty is to the estate, he must ensure his actions also are for the benefit of the estate’s legitimate creditors and heirs. In most cases, the estate’s interests are aligned with those of the creditors and heirs, which is to maximize the total value in the estate. Of course, conflicts of interests often occur, and the personal representative has some flexibility to overcome them without resort to the court, but not always. The personal representative may not favor one heir over another or make distributions to heirs when there is a question as to whether the estate will have enough assets available to satisfy all of its debts.
There are other, more specific duties such as preparing an inventory and annual returns, and publishing a notice to creditors in the newspaper of the county where the estate is opened. It is important for a personal representative to understand how his duties apply in practice because each estate is unique and presents problems that don’t always have clear solutions… and the wrong solution can land the personal representative in front of a judge.
The personal representative also has certain powers with regard to estate property. If there is a Will, it usually grants the executor all the powers necessary to fully administer the estate without any court involvement. However, in the case of an intestate estate, the administrator’s powers are limited to hiring legal counsel, compromising claims by creditors, paying the estate’s debts, and distributing property to the heirs. To act beyond those powers, such as selling estate property to generate cash, without court permission is technically illegal, but an administrator often will do so without penalty if the action is in the interest of the estate, especially if all of the heirs consent to the action. Also, an administrator may ask the heirs for full power to administer the estate at any point during administration (and usually does so at the time he petitions to become administrator).
A personal representative is allowed compensation. Where there is no agreement between the decedent and personal representative, which is almost always the case, compensation is set by statute.
Estate administration is no walk in the park. A personal representative with the best intentions can easily misstep and wind up accused of breaching her fiduciary duty or worse. On top of that, it often is a thankless job and leads to disruptions in family relations. The Libby Law Firm has the expertise to guide you through administration, wherever you are in the process, and manage the inevitable problems that arise among creditors and heirs. Please call us to set up a consultation and find out what you should know.
