Before attempting the paperwork, it’s essentially that the Personal Representative follow some general guidelines. South Carolina Code Section 62-3-709 explains that “every personal representative has a right to, and shall take possession or control of, the decedent’s property, except that any real property or tangible personal property may be left with or surrendered to the person presumptively entitled thereto unless or until, in the judgment of the personal representative, possession of the property by him will be necessary for purposes of administration.” In essence, this means it is the responsibility for the Personal Representative to collect the assets UNLESS they are in the possession of the person who will ultimately receive them.

As you might imagine, this duty causes a great deal of friction between Personal Representatives and heirs. Imagine that your husband passes away and that your step-son (his son) is the Personal Representative. You could potentially return home to find ½ of your home furnishings gone because the Personal Representative “took possession” of them to administer the estate. Again, Personal Representatives should walk a fine line between performing their duty and using their powers unwisely. Meanwhile, heirs who are in possession of property belonging to a decedent must cooperate in ensuring that the Personal Representative is aware of the properties location.

Once the Personal Representative has a general grasp on the decedent’s assets, he must list them according to the type of asset and include information about any joint owners. Before attempting the paperwork, a good Personal Representative can prevent a migraine by making a list and collecting the information as follows:

REAL PROPERTY – You will need a copy of the deed to determine who the exact owners are and whether or not the property is held jointly, or jointly with a right of survivorship. You will also need a value for the inventory. This can be the tax assessed value or the fair market value as determined by an appraisal or cost market analysis (available from a real estate agent). Please note that in an effort to reduce estate costs and fees, Personal Representatives will often make the huge mistake of undervaluing the property which can have negative tax consequences on those receiving the property from the estate. Tread carefully in this area, the courts can not and will not give you advice on the value for this reason. If you are unsure how to value, discuss this issue with your attorney or CPA before filing the value with the court.

PERSONAL PROPERTY – The courts don’t expect you to list every piece of stuff owned by the decedent; however, if an heir begins to contest your management of the estate, a more detailed list may be required. Initially, it’s safe to group items in to large categories and give them a resale value (i.e. – what could you get for them if you had to sell them at a garage sale). Common categories include household furnishings, clothing, electronics, collectibles, etc. Sentimental values do not go on an inventory. For example, while your mother’s china may be the prized possession every heir is after, it should only be valued by it’s actual resale value. EBay or other online resources are very helpful in this regard. Kelly Blue Book or Edmunds are great for placing a value on cars (which also fall in this category).

BANK ACCOUNTS – In South Carolina, there are essentially three ways to title a personal bank account. Sole ownership (decedent was the only person with his/her name on this account), joint ownership (account was held by two or more people), and joint ownership with rights of survivorship (more than one person was on account and ownership shifts automatically to other owners upon death). It is essential that you contact each bank where the decedent held an account and determine the form of ownership. The type of ownership determines not only where it goes on the inventory form, but also who has the right to the funds.

IRA’S – The court will need to know if the decedent had any IRA accounts. If so, you are only required to give detailed information on the account if the estate was named as the beneficiary. Otherwise, most courts just want to know that the account existed and that it named a specific beneficiary to receive the proceeds.

DEBTS – The court will need to know any debts held by the decedent. This does not include consumer debts or debts incurred after death (such as funeral expenses). The debt reported to the court is essentially the debt related to other assets. For example, if a car appears in the personal property, this is where the car loan will appear. If a home appears in the real property, this is where the mortgage would go.

List in hand, it’s time to tackle the official inventory form which must be submitted to the court within ninety (90) days. Having your items sorted as stated above will go a long way in getting you prepared for the inventory form. Another tip – the first page should actually be done last so start with page 2.

And, if for some reason, you just can’t get it done in time, you can use the form 352 (located here) to file for an extension. Good luck!

Related posts:

1. Personal Representative’s Duties: Duty to Inform
2. Pick Me, Pick Me! Who gets to be the Personal Representative of the estate? (Part I)

Immediately upon appointment, the P.R. agrees to accept certain duties. These duties can be found in Article 3, Part 7 of the S.C. Probate Code for those interested in reading them in depth. The first specific duty you will find is 62-3-705 – the duty to inform heirs and devisees of your appointment.

DUTY TO INFORM – Within 30 days of your appointment, you should have notified all heirs (those who receive if there is not a will) and devisees (those who are named in the will) of your appointment. South Carolina courts provide you with Form 305PC for this purpose which can be downloaded here. Promptly complete the form, send it to everyone who is an heir or devisee. Then, complete the proof of delivery form to notify the court you have complied with this requirement. This seems easy enough, but this simple task is often handled improperly or ignored, which simply sets the stage for future disputes. Be aware of the following mistakes:

1) “I don’t have to inform them, they aren’t in the will.” – The first fatal mistake made by P.R.’s is assuming they only have to send this form to people who will actually be receiving from the estate. This is not true. The purpose of this form is to put everyone on notice, even those who have been disinherited, that the estate has been opened. The opening of the estate triggers numerous deadlines for interested parties to bring an actions including will contests, elective share claims and others. Because of this, everyone who has an interest in this person’s estate is to be notified. In cases where there is no will (intestacy), you will only have one group to notify – all intestate heirs. If; however, there is a will you may have two separate groups. The first group are those listed in the will (whether they are family or not) and the second group are those that would have received it the will was not in place (intestate heirs). Failing to notify someone can cause great delays in the estate. Furthermore, completing the form to say that you have notified someone when in fact you have not is considered perjury.

2) “I am close with my family and they already know I am in charge.” – Despite the fact that everyone may already know of your appointment, you still must follow the court process for giving them “official” notice. People often assume that they don’t need to do this because they have already verbally communicated with everyone to let them know. Keep in mind that this form contains information essential for others to contact the court, including the case number and actual date of your appointment. It’s unlikely that these details are mentioned in casual conversation and even if they are, it’s just easier to follow the rules then to make assumptions that will later get you in trouble.

3) “I’m not sure where this person lives.” – The Probate Courts hear this excuse all the time and unfortunately for the new P.R., they are uninterested in hearing it again. If you have taken on the duty to serve as P.R., it will be essential for you to establish communications with the parties interested in this estate. Very frequently, people who offer this excuse know exactly where the person is, they just hope that this will somehow eliminate the need for keeping them involved. It does not. So, before telling the court that you can’t find an heir or devisee, you must ensure that you have used every available resource to locate them. This includes letters to other interested parties to determine their location, an exhaustive internet search, certified mail sent to their last know address, a public records search, etc. In the end, it is very very rare that an heir actually can not be located. And, if you truly can’t find them you will need an attorney to assist you on their behalf. So, know before you go to court with this excuse that it’s unlikely to work and if it’s in fact true, the court will expect the resources of the estate to be used to resolve the problem.

4) “I didn’t think I had to let them know because they are minors.” – Even children are entitled to be informed. When dealing with heirs or devisees who are minors, it is appropriate to address information to them through their legal guardians. The same is true of adults who may be incapacitated.

5) “I sent it in the mail but they must not have gotten it.” – As much as we love to complain about the U.S. postal service, in reality it is rare that they loose mail. And, it’s not a coincidence that the one piece of mail that gets lost is always the one to the heir or devisee that no one likes. Don’t use this excuse, be a smart P.R. and use certified mail for any heir or devisee who you know is likely to claim that you aren’t doing your job. While the S.C. Code allows for delivery by ordinary mail, most lawyers will always use certified mail in cases where we know we may be asked to prove delivery.

The bottom line is that you can not hide out from the duties you have undertaken, so quickly establishing a line of communication with the heirs and devisees is essential. Having a database or spreadsheet with their current addresses, emails, and phone numbers will make this process easier in the long run. And, if there is someone in this group that you don’t get along with, understand that this means you should communicate with that person more, not less, to ensure you stay out of trouble.

Related posts:

1. Removal of the Personal Representative – The Basics
2. Personal Representative’s Duties: Duty to Inventory Assets
3. Pick Me, Pick Me! Who gets to be the Personal Representative of the estate? (Part I)

Minor Children – If the decedent is not legally married at death (whether by divorce, death or perhaps they had the common sense never to get married in the first place), their children have the right to serve as P.R. But, what if their children are minors? Obviously, a minor is not “fit” to serve (minimum age is 18) and therefore the S.C. Probate Code determines who is next in line. Often times in these situations, people assume that it would be the decedent’s parents; however, that is not the case.

In South Carolina, if you leave behind no will and have minor children, before YOUR parents are entitled to serve, the appointment will go to THEIR other parent or guardian. That’s right, your ex-spouse (or baby mama as the case may be) will suddenly be in charge of everything you own. And, it doesn’t matter that they have told 100 people they hate you or that they took you to the cleaners in family court, unless it can be shown that they are unfit to serve due to a criminal history, incarceration, incapacity, etc. then they get the job. The bottom line is that since you didn’t choose someone in your will, the law assumes that the best person to serve is the legal guardian of your primary heir. This scenario gets even more entertaining when you have children with more than one person so that the court must now referee between the two. Enter Jerry Springer . . .

Separation – Because South Carolina does not have “no fault” divorce, many couples have to lived separated for 1 year in order to qualify for a divorce. To avoid expenses and complications, many of them don’t part ways through legal documentation and instead simply “split up.” While this may save you money in family court, the consequences can be disastrous in probate court. The S.C. Probate Code is clear in Section 62-2-802 what is required before a spouse will loose their entitlement to be considered a “spouse.” Essentially, one of the following has to have occurred:

A divorce or annulment. And, it isn’t even enough for a couple to “think” they are divorced. The Judge has to actually have signed the decree. In a landmark case titled Hatchell-Freeman v. Freeman a wife was actually entitled to serve as P.R. and entitled to receive a share of the estate even though they had attended the final hearing on their divorce (simply because the Judge had not signed the decree).

A decree of separate maintenance or property settlement agreement acknowledged by the court which which terminates these rights.

Adultery, abandonment or other acts of the spouse are not relevant to the Probate Court under these sections. So, the bottom line is that if you find yourself in this situation you need legal help and a properly drafted will to ensure your ex isn’t in control against your wishes.

Common Law Marriage – We will discuss common law marriage in greater detail in a future post but for purposes of this discussion, just know that common law marriage must be affirmatively proven in the court and until that time the question of who has priority to serve as the Personal Representative may be difficult to answer. Because a spouse has priority to serve, the question is – who serves while it is determined whether or not someone is the spouse? In this case, the court may rely on a Special Administrator to handle the estate until the marriage issue can be resolved. Or, in a perfect world, the potential spouse and other heirs would agree by consent as to who will serve in the interim.

There is no shortage of court hearing to determine who will serve as Personal Representative. And, even after the appropriate person is appointed, parties may find themselves litigating whether or not that person is doing the job properly. In the end, the only way to protect your assets from these disputes is to make these choices before you go!

Related posts:

1. Pick Me, Pick Me! Who gets to be the Personal Representative of the estate? (Part I)
2. Choosing a Personal Representative
3. Personal Representative’s Duties: Duty to Inform

Luckily, there are many estates where the court does not have to get involved in choosing the appropriate person.  For example, when you write your will, it should always state whom you wish to serve as the Personal Representative. It’s also wise to name an alternate in case your first choice is not available.

However, when you die without a will (this is called “intestacy”), the court will have to determine who should be in charge. South Carolina Code Section 62-3-203 determines who has the priority to serve, but the Judge may use his/her discretion to determine if someone with priority is not suitable (or disqualified) for the appointment. Some examples will help explain who gets to serve but remember again that these only apply if you don’t name someone in your will.

The Spouse – Your spouse will be the top pick to serve as Personal Representative (P.R.) if you are lawfully married at the time of your death. This can seem clear but a lot of confusion can arise when couples are separated, estranged, or allegedly common law married. S. C. Probate Code Section 62-2-802 outlines what actions will terminate a spouse’s rights to serve. A spouse serving can also cause problems when the children involved are from a previous marriage. Despite the possibility for future conflicts, the spouse is entitled to serve and will be appointed by the court unless it can be shown that he/she is unfit to serve. A person may be unfit to serve if they are incarcerated, have serious financial problems (check fraud, bankruptcy, history of financial wrongdoings), or are incapacitated. Even if the spouse can’t serve, they are entitled to nominate someone to serve on their behalf.

The Children – If there is no spouse, or the spouse is unable to serve (or chooses not to and doesn’t name a nominee to serve in their place) then the children are the next in line. If there is only one child, the court will appoint that child. The debate usually begins when there are multiple children. Since all children have equal priority to be the P.R., the court will choose unless all of the children can agree. When left to the court, the Judge will consider many factors including the opinions and nominations of the heirs, financial stability, criminal history, proximity to the court and many others.

While these two rules will address the majority of cases, there are more complicated issues that arise with minor children, divorced spouses, and those with no children or spouse that will be discussed in Pick Me, Pick Me Part II.

Related posts:

1. Who will be the Personal Representative? (Part II)
2. Personal Representative’s Duties: Duty to Inform
3. So how long is this going to take?

Whether they are called Personal Representatives (P.R. for short), Executors or Administrators, they all have the same purpose – to manage your assets, file proper documentation with the courts and IRS, deal with any creditors you may have had and properly distribute your assets to your heirs. It’s not an easy job and it will be best for everyone if you give some thought today into who would be the best person to handle this for you after you are gone.

Here are some considerations I discuss with all of my estate planning clients before they make this choice.

Age – When naming a P.R., try to name someone younger than yourself. Most people don’t update their wills regularly and statistically, if you name someone older than yourself (a parent, older sibling, etc.) they will have already passed away. There are plenty of exceptions to this “rule” when people want to name a spouse or when they have an illness that realistically will bring about their death before those that are older than they are. If you do choose someone older than you, ensure that your alternate (second choice) is younger and be prepared to update your document if they pass away or become incapacitated.

Location – It is not necessary that the person you choose live in the same city or state that you do; however, if you have good options close to home it will make their life easier. Being someone’s P.R. will require the person to collect and manage all of your assets (most of which will be where you lived) and can require several trips to the court as well. Personal Representatives who must travel repeatedly usually end up with high travel expenses, missed days from work, and delays from the inability to be nearby when needed.

Financial Stability – If someone can’t manage their own finances, why would you ask them to manage yours? Choosing a P.R. means entrusting someone with full access to your bank accounts, investments, personal property and more. For this reason, you need to ensure the person you choose is financially responsible and trustworthy. This is a lot of power to give someone and putting that power in the wrong hands can have disastrous consequences for your heirs. If you don’t have anyone in your life that is trustworthy, this may be the time to think about using a professional P.R. (attorney, bank, etc.) or putting in your will that you want your P.R. to be bonded.

Relationship with your heirs – Don’t overlook that this person will be working for and with your heirs. If your brother and wife have never really gotten along, it would not be wise to name him as the P.R. when your primary heir is your wife. Instead of considering what type of relationship your potential P.R. has with YOU (which is irrelevant because you will be dead), think about what type of relationship they have with your heirs. Blended families, second marriages, and strained family relationships can make this a challenge.

In closing, after you have chosen your P.R. and an alternate, it’s a good idea to let the people know they have been named. Some will be honored and others may decline (especially if they have done it before).  Either way, you will have the chance to know their willingness and to discuss with them any problems you foresee with your estate. And remember, if you think choosing you own P.R. is a daunting task, imagine how the probate court feels if they have to make the choice for you after you are gone.

Related posts:

1. Who will be the Personal Representative? (Part II)