A Tip for Personal Representatives Going Through the Probate Process

Becky Cholewka:  I have a tip for those of you who are acting as personal representative in a probate process. Some states call that executor. Here in Arizona, we call that personal representative.

When you are dealing with collecting assets, especially from financial institutions, you want to make sure that those financial institutions are submitting checks written out to the estate of, rather than to the personal representative’s individual name, and rather than to the beneficiaries of the will.

Recently, we had a situation where a financial institution requested from the personal representative, along with the paperwork showing that this individual was the legal representative of the estate, they also requested a copy of the will, which the personal representative gave to them.

From there, that financial institution, instead of writing the check out to the estate of the person who had died, they wrote the check out to the beneficiaries in the will. Here’s the problem with that. First of all, as we go through a probate, the beneficiaries of the will are actually the last people to get paid in the probate. There’s about four, five, people ahead of them, including the cost of the administration of the probate itself.

So, the attorneys and the cost for the personal representative, state taxes, federal taxes, liens on certain things, creditors that the person who has died has. Then, whatever is left over, the beneficiaries get. It is improper for a financial institution to list the beneficiaries as the people who are getting distributions from that institution.

The second problem with that is, not only is that the case but the judge still has to prove that that will was appropriate. For example, we could have had a judge say, “You know what? That will wasn’t executed properly,” and, “Therefore, the beneficiaries in that will do not get to legally take.”

We never want to leave it up to financial institutions, as to who has the legal right to money. Those checks should be given only to the estate of, or the personal representative of the estate, rather than to individual names.

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