Personal Representative Liability | MN Probate Law

Personal representative liability in a Minnesota Probate

“Liability” is a very serious concern. Black’s Law dictionary defines “liability” as:

The state of being bound or obliged in law or justice to do, pay, or make good something; legal responsibility. Wood v. Currey, 57 Cal. 209; McElfresh v. Kirkendall, 36 Iowa, 225 …

It is important to understand that a personal representative or an executor of an estate could be held “liable” or “obligated in law or justice” to pay for certain debts if he/she is doing things improperly. What does improperly mean? It is complicated, but improper personal representative conduct can include things like:

• Breach of Fiduciary Duty
• Negligence
• Failure to pay creditor claims
• Failure to make distributions properly
• Excessive cost and fees for the administration of the estate

All of the above are only a few examples of improper behavior of a personal representative which could cause liability. Minnesota probate law if very clear that personal representatives needs to serve the estate – not themselves.

Failing to serve the estate can result in a claim for breach of fiduciary duty. When someone signs a petition to probate the estate in a Minnesota court, they also must sign a document called an “Acceptance of Appointment and Oath.” This oath is taken very seriously by the courts. The personal representative is swearing, under oath, that they fill follow the law.

Breach of Fiduciary Duty

The most common example of personal representative liability in a Minnesota probate is a claim for breach of fiduciary duty. What does this mean?

Basically, a “fiduciary” is alike a bank: they are required to hold money, in trust, for others. They most be honest and diligent and invest in a prudent manner.

They must pay bills and act in a lawful fashion. Unfortunately, a number of personal representatives often view estates as a “free lunch” and act less than honestly. Doing so can create claims for breach of fiduciary duty.  The big example is not handling estate cash properly.

Some common examples of breach of fiduciary duty are:

• Self-dealing
• Improperly using estate money
• Combining estate funds with personal funds
• Failing to invest properly
• The failure to act in the interested parties’ (heirs) best interests
• Lying about estate assets
• Not locating estate assets
• Favoring one beneficiary over others

Above are only some of the examples we have seen as Minnesota probate attorneys.

Minnesota Probate Lawyers

Of course, it is always a good idea to talk with an experienced probate attorney if you have any questions about personal representative liability.

Joseph M. Flanders and Flanders Law Firm LLC have helped both personal representatives and heirs deal with this thorny legal issue. A lot of money can be at stake in estate and people need to deal with it properly.

Contact the probate law firm today for your free initial legal consultation. 612-424-0398.