“What happens if I die without a will or trust?” The answer is that a California Personal Representative will be appointed by the court to administer your estate. A “’Personal representative’ means executor, administrator, administrator with the will annexed, special administrator, or successor personal representative.” California Probate Code §58. The order of preference, by priority (not all inclusive) is: the surviving spouse or domestic partner, children, grandchildren, other issue, parents, and brothers and sisters. California Probate Code §8461.

Even if you have a will that names the personal representative for your estate, the probate court must still approve of your selection. If you do not have an instrument in place, the probate court may require that the personal representative post a bond in order to serve in the position, which could cost thousands of dollars. The bond requirements include a credit check of the personal representative’s net worth.

Duties and Liabilities of a California Personal Representative

The personal representative is required to sign an acknowledgment of receipt of the “Duties and Liabilities of Personal Represenatitive.” California Probate Code §8404. The personal representative is an officer of the court, and the acknowledgment (drafted by the state Judicial Council) advises repeatedly that “[a]n attorney is best qualified to advise you about these matters.”

Managing The Estate’s Assets: The duties include managing the estate’s assets and investments prudently (the “prudent investor rule”), that is with the care of a prudent person dealing with someone else’s property. Another rule familiar to estate planning attorneys is the prohibition of commingling estate funds. Money in the estate must earn interest and be kept in insured accounts, and an estate planning lawyer should be consulted before making investments. Additionally, “[y]ou should not spend any of the estate’s money unless you have received permission from the court or have been advised to do so by an attorney.”

Estate Property: A California personal representative must locate and take possession of all the estate’s property, determine its value (likely by court-appointed referee), and file an inventory and appraisal within four months of all the assets in the estate. At the time of the inventory and appraisal, the personal representative must file a change of ownership statement with the country recorder or assessor where estate property is located.

Notice to Creditors: The personal representative must mail a notice of administration to each known creditor within four months of appointment.

Insurance: In California, the personal representative is required to obtain and maintain adequate insurance covering the assets and risks of the estate for the entire period of the administration of the estate.

Record Keeping: You must keep complete and accurate records of each financial transaction affecting the estate, including money and property received, spent, and the dates of the transactions. These records will reviewed by the court.

Consulting an Attorney: The Judicial Council’s form expressly states that “if you have an attorney, you should cooperate with the attorney at all times. . . When in doubt, contact your attorney.”

Finally, the form warns that your actions as a personal representative are “governed by the law itself and not by this summary.”

Filed under: Estate Administration, Probate