Can They Sit on Their Hands? Obligations of Personal Representatives to Diligently Administer Estates
I have received several inquiries recently from heirs of estates, expressing frustration over delays in the administration of those estates. In some instances the estates have existed for more than a decade, yet distributions have not been made to heirs and the estate has yet to be closed up.
There can be many reasons for delayed administration, but they are usually explanations and not excuses. In general, an estate should be capable of being administered to its conclusion within two years of the date of death.
In the first year following death, two important events occur with respect to an estate. First of all, the estate tax return is required to be filed within nine months of the date of death. Quite frequently the filing of the estate tax return is delayed because either (a) certain assets cannot be located; or (b) assets that have been identified (e.g. real estate, business interests) need to be appraised. Secondly, any creditors of the estate (i.e. persons or businesses who claim that the decedent owed them money) have one year from the date of death to bring a lawsuit against the estate. Personal representatives of estates are therefore required to wait until at least that one year period has expired before making distributions.
Even in the face of these limited requirements, administration can often take longer. However, the most frequent causes for delayed administration are inexcusable and can be placed in three broad categories:
1. Personal reps who try to administer estates without the assistance of an attorney;
2. Busy (or lazy) attorneys who make the estate a low priority; or
3. Personal representatives who have a financial incentive to delay administration.
The third category is the most common among the three. The profile here is usually pretty consistent. The decedent dies owning property, and the personal rep decides to move in after the decedent’s death, or to continue living there, quite often with no need to make a mortgage payment. That’s comfortable for the personal rep, and as we know, objects at rest tend to stay at rest (or so Isaac Newton theorized).
So if you’re an heir who has been waiting patiently for your inheritance, what can you do? If you haven’t hired an attorney to represent your interests, you should do so immediately; you would be amazed and encouraged by how the presence of an attorney can “stir the pot” and accelerate administration. Beyond this, you or your attorney can petition to remove the personal rep, file a petition to compel the rendering of an inventory and accounting of the estate, and/or file a petition to compel the sale of estate assets such as real estate. All of these are fairly inexpensive options, with the exception of the petition for removal, which can be quite contentious. However, petitions for removal often can be used as “leverage” to remedy prior delays in administration, and I have been involved in many cases where the petition is withdrawn following the making of concessions regarding the sale of assets and the filing of the inventory and account.