The Duties And Obligations Of Executors And Administrators Of Estates
The personal representatives of an estate are those persons who, by law, undertake the duties and obligations of administering the estate of the deceased. They are recognized for all purposes as the deceased person's living representative who will carry out his wishes according to his will, in the case of an executor, and an administrator where there is no valid will. Whatever the nomenclature used, the duties of the personal representative generally entail the collection, preservation, realization and distribution of the income and assets of the estate.
Collection and Preservation A personal representative has the first and foremost duty to collect and preserve the assets of the deceased. He should therefore take possession of or assume control over the assets as soon as he can properly do so. He must gather and keep safe the deceased's documents and property, including the original will, bank books or statements, titles to land and motor vehicles and share certificates. He should also collect all means of access to the deceased's assets, such as keys to real property, motor vehicles, safety deposit boxes, boats etc.
The personal representative has an ongoing duty to ensure the preservation of those assets until he can realize and distribute the assets or the proceeds of the assets to the creditors of the deceased firstly, then to beneficiaries of the estate. A personal representative cannot allow assets to fall into disrepair and should ensure that assets are secured from theft, as best as the estate can afford. The personal representative should take reasonable steps to avoid loss to the estate, but this duty does not extend to an obligation to ensure that the assets are meeting their maximum profitability or appreciation in asset value.
Realization of Assets and Payment of Debts A personal representative should take care in realizing assets and where appropriate obtain legal or professional advice in doing so. Valuation reports should be obtained to guide the appropriate sale price for assets as well as newspaper advertisements where appropriate to obtain optimal market exposure.
Distribution Once the personal representative is in a position to transfer assets of the estate, normally after they have obtained the requisite grant of representation from the courts, they are obliged to advertise for creditors of the estate at least once in a local newspaper and await a period of no less than 6 weeks. The assets must be distributed according to the terms of the will or applicable intestacy laws. Distribution is however subject to the solvency of the estate (where assets of the estate exceed its liabilities) or insolvency (where liabilities of the estate exceed the assets). All just debts of the estate, such as funeral expenses, undischarged mortgages, unsatisfied loans, government fees and taxes must be paid before any distribution can be made to the beneficiaries. Specific assets also maybe charged with the payment of specific debts. It is good practice for personal representatives to advise beneficiaries in cases where the asset they expect to get, will have to be disposed of, in order to satisfy the debts of the estate.