Do You Need Business Skills to Act as the Personal Representative of a Deceased Person’s Estate?

A lot of people dream of opening a business, but not even Wednesday Addams would focus her entrepreneurial aspirations on being the personal representative of a deceased person’s estate. Probate is like filing your income tax returns, except at the end, you don’t get a tax refund check that you can use to buy a new living room couch, take your family out to dinner at the Cheesecake Factory, or file for bankruptcy protection. The estate has no hope of becoming profitable, at least not for the personal representative, even if the decedent was wealthy. In fact, the estates that remain open for years while continuing to generate income are the messiest probate cases, the one where a deceased celebrity continued to earn royalties on his or her work, while the heirs could not agree about who should inherit the proceeds. Despite this, acting as the personal representative of an estate in probate is a matter of financial management. If you need guidance or legal representation in your role as personal representative of a deceased family member’s estate, contact a Dade City probate lawyer.

An Estate Is Like a Business, Except Without the Entrepreneurial Sparkle

Even if you do not think of a deceased person’s estate as a business entity, the IRS does. A deceased person’s estate has its own taxpayer ID number; estate is its own entity category, alongside sole proprietorship, nonprofit organization, corporation, limited liability company (LLC), and all the others. Applying for a taxpayer ID number is one of the first things you do after the court appoints you as personal representative of the estate, but you cannot apply for the taxpayer ID number until the court officially appoints you.  If you have ever started a business, then you will remember that applying for a taxpayer ID for the business is also the first step. Consider that a person’s Social Security number dies with the person, so you cannot simply use it for the estate; this is why the estate needs its own taxpayer ID number.

Once you have a taxpayer ID for the estate, your next step is to open a bank account for the estate. You will need to use this account to pay the taxes and debts owed by the estate. Likewise, the estate might receive income, such as the last pension payout the decedent received or the settlement from a lawsuit that was still pending at the end of the decedent’s life. Once the estate settles, the personal representative closes the estate’s bank account and distributes the proceeds to the heirs in accordance with the decedent’s will or according to the laws of intestate succession.

Contact a Florida Estate Planning Attorney About Your Duties as Personal Representative of an Estate

An estate planning attorney can help you fulfil your tasks as personal representative of a deceased person’s estate.  Contact The Law Office of Laurie R. Chane in Dade City, Florida to discuss your case.

Source:

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