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 recognised for all purposes as the deceased person’s living representatives 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, realisation 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 realise 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.

Realisation of assets and payment of debts

A personal representative should take care in realising 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 six 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 may be 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.

Obligations

In the fulfilment of his duties, the personal representative should:

1. Give instructions to an Attorney-at-Law to apply to the court for a grant of representation in the personal representative’s name. This is vital as many institutions that hold the assets of the estate, such as banks, building societies, the Titles Office, etc will not legally part with possession of the asset in the absence of the sealed grant

of representation issued by the court.

2. Value the assets of the estate. This is to ensure accurate accounting and computing of the government taxes and fees likely to be imposed on the estate, as well as to protect against claims for loss of value of the estate.

3. Contact beneficiaries and creditors, and consistently update them on the progress of the administration of

the estate.

4. Contact the holders of the assets of the estate, such as banks or building societies, to advise them of the passing of the deceased and request that the balances left in those accounts be transferred to an estate account, or for them to be held and preserved pending the grant of representation.

5. Settle government taxes and fees payable by the estate. Normally these taxes are the transfer tax payable on death in the case of stock, shares and real estate held by the deceased and Stamp Duty imposed on the grant of representation. However, there may be other taxes, such as income tax, which may have been payable by the deceased prior to passing; these would also have to be settled. Note that if the Transfer Tax is not paid within a year of the deceased’s death, then interest accrues on the outstanding tax payable at the rate of six per cent per annum.

6. Advertise for creditors and settle any balances/liabilities the deceased had with them.

7. Distribute the remaining assets to the beneficiaries.

8. Account to the beneficiaries and the creditors of the estate through the courts by filing the accounts of the personal representative’s administration of the estate. Though not a requirement (the law treats this obligation as discretionary), it is advisable from a liability standpoint that personal representatives take this ultimate step. The accounts, once accepted by the court after notice to all interested parties, are unassailable and act as an absolute bar (save in the case of fraud) against any claim by other parties to an estate.

Robert Collie is an Associate at Myers, Fletcher & Gordon and is a member of the firm’s Property Department. Robert may be contacted via robert.collie@mfg.com.jm or you can visit the firm’s website at www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.