When a person dies and owns property, the distribution of assets to the beneficiaries usually occurs via probate. However, not all assets need to go through probate.
A personal representative is a person named to administer the decedent’s estate. This individual has many responsibilities during the probate process.
Assets that do not go through probate
According to the State Bar of Michigan, non-probate assets include those that have a designated beneficiary or a surviving joint-owner. These include:
- Retirement accounts
- Annuities
- Life insurance policies
- Jointly owned business
- Jointly owned bank accounts
Assets held in a trust also usually avoid probate.
The role of the personal representative
According to Michigan State University, the decedent may have named a personal representative in the will, and if not, the court will appoint one. This person has numerous duties to uphold during probate, which can last months or even years.
Some of the initial responsibilities include locating, gathering and securing all named assets; appraising or determining values of certain assets; reviewing property insurance and increasing or renewing if necessary; forwarding decedent’s mail; maintaining upkeep on property, and setting up a system to record all estate transactions.
The personal representative must conduct due diligence to find all creditors and pay all debt as well as collect payment from all debtors. The PR must pay all past and ongoing bills of the estate, such as the mortgage. The PR will also file and pay taxes for the estate. If necessary, the PR can sell assets to pay bills.
The personal representative can hire other professionals to assist with some of the responsibilities, especially in complex situations. The estate pays for these services as well as for the duties of the personal representative. Once everything is in order, and there are no bills left to pay, the PR can distribute assets to the named heirs and close the estate.