- Who Takes Care of the Heirs? Understanding Your Rights as an Estate Beneficiary
Who Takes Care of the Heirs? Understanding Your Rights as an Estate Beneficiary
By: Thomas J. Moran
If you are expecting to receive an inheritance from the estate of a loved one who has passed away, it can be a lengthy and frustrating process. Weeks and even months can go by without any news on when you can expect your share of the estate. Inquiries with the estate representative may go unanswered, and if you are not close with the representative you may begin to doubt whether that person is doing everything they are supposed to do under state law. Unfortunately, as an attorney who handles claims against estate bonds, I have seen a number of cases where the personal representative has misappropriated estate assets to the detriment of the heirs. While it is not common, it does happen, and when it does it can cause a lot of problems, including financial loss, stress, loss of valuable time, and family strife.
There are two types of decedent’s estates: testate (where the decedent had a will) and intestate (no will). In a testate estate, the will in most cases has the force of law and the instructions in it must be followed as to the distribution of the decedent’s assets. For intestate estates, your state’s inheritance statutes will provide the framework for who is entitled to receive assets from the estate, and what they are entitled to receive. In either type of estate, the personal representative – called an executor in testate estates and administrator in intestate estates – is required to report to a quasi-judicial officer regarding all of the assets the decedent owned at the time of death, and how those assets are used to satisfy obligations of the estate and the shares of the beneficiaries. The title of this officer varies by state; in Virginia, he or she is called the Commissioner of Accounts, and this is a county- or city-wide title, although some larger jurisdictions have two.
When an estate is opened, the personal representative is required to send a notice of probate to all heirs of the deceased person. This notice informs you that you are entitled to copies of all important documents that the personal representative files. It is important to note that you will not necessarily get these documents as a matter of course. Instead, you have to opt in by sending a written request to the personal representative. This opt-in is strongly recommended.
The documents you will be most interested in as an heir or beneficiary will be the inventory and the accounting. The inventory must be filed four months after the personal representative qualifies with the court. It is a list of each and every asset of any value that the decedent owned at the time of death. This includes accounts, investments, businesses, tangible items like automobiles, electronics, and collections, and real estate (even if it is not considered part of the estate). The personal representative is required to use his or her best efforts to place values on each asset. This is a simple exercise with liquid assets and real estate, but be vigilant with items that are not as easily valued. If you believe an item has not been listed that should have been, or if an item has been undervalued or overvalued, you should consider contacting the Commissioner or an attorney.
The accounting is just that—a recap of what the personal representative did with the estate’s assets over a particular time period. In Virginia, the first accounting is due sixteen months after the personal representative qualifies with the court, and additional accountings must be filed every sixteen months after that until the estate is closed. The accounting must list all income received by the estate, all gains or losses in value, all sales of tangible assets or stock, all expenses paid, and all distributions made. The accounting should be carefully reviewed by all heirs to be sure that it correctly states what has been distributed to them. The same is true of any beneficiary acknowledgement an heir is asked to sign.
A personal representative has three basic jobs: (1) marshal and, to the extent necessary, liquidate the assets of the estate, (2) pay the obligations of the estate, whether incurred before or after the decedent passed away, and (3) distribute the remaining assets to the heirs in accordance with the will or state law. The third step is of the most interest to the heirs, but keep in mind that it cannot be accomplished until substantial progress is made on the first two tasks. This is a frequent source of disconnect between the heirs and the personal representative. Often, a personal representative will need to, for example, wind down or transfer a closely held business, oversee the fixing up and sale of real estate, liquidate collections and investments, and/or be sure all tax obligations are satisfied. The decedent will often have incurred medical bills which can take a significant amount of time to be resolved.
If the delay in settling an estate goes on an unreasonable amount of time, or if you suspect that the personal representative has acted improperly, you should strongly consider contacting the Commissioner assigned to the estate. If this doesn’t yield results, an experienced estate litigation attorney should be consulted. A personal representative has a fiduciary duty to the heirs that requires him or her to protect their financial interest in the estate. If this duty has been breached, the personal representative must reimburse the estate for any waste or misappropriation of estate assets, and if they cannot do so, that duty will fall to their surety. An attorney will be able to help determine whether your rights as an heir have been breached, evaluate your potential recovery, and help you navigate the process of challenging the personal representative’s activities.
If you have questions about an estate of which you are a beneficiary, please contact Tom Moran at 804-362-9434 or firstname.lastname@example.org.