Are you expecting an inheritance? If so, you’re not alone; many Americans do, too, with the average U.S. household inheriting about $46,200. In other cases, beneficiaries or heirs inherit real estate, such as houses.
As a beneficiary or heir, you’ll likely hear the terms: “personal representative” and “executor.” It’s vital to understand what they mean and how they differ, as they’ll be the ones handling your inheritance.
To that end, we created this personal representative vs. executor comparison guide. Read on to learn who they are and what sets them apart.
Personal Representative vs. Executor: Key Differences
Personal representatives are individuals appointed as estate managers when estate owners die. They are responsible for estate administration. That means they oversee the deceased person’s assets and financial affairs.
Suppose an older loved one passed away and left you a real estate inheritance. If your loved one has appointed a personal representative, this individual will ensure you get your inheritance. They can also help you learn how to sell your inherited house.
On the other hand, an executor is a type of personal representative. Estate owners have specifically named them in their will to act as their estate managers.
So, an executor is always a personal representative, but a personal representative isn’t always an executor. That’s because other types of personal representatives exist, such as administrators.
Administrators have similar functions as executors, managing estates of deceased owners. The chief difference is that a court has appointed them because the estate owner didn’t leave a will.
Personal Representative Responsibilities
Personal representatives named executors must follow the deceased’s last will and testament. Since these legal documents are highly personal, their contents can vary widely from one estate owner to another. However, they generally state the following executor duties:
- Locate, organize, and value assets
- Pay the remaining debts left by the deceased
- Find and coordinate with beneficiaries
- Distribute assets to heirs and beneficiaries
Sometimes, a deceased estate owner may have specific instructions on asset distribution. For example, their will may state that a piece of real estate must go to two beneficiaries. It may further state that the beneficiaries should sell the property and then split the proceeds.
Whatever the instructions are, personal representatives must adhere to all of them.
Who Can Be a Personal Representative?
Personal representatives are usually close friends or relatives of an estate owner. They’re also often beneficiaries of the estate for which they are the executors.
Regardless of their relationship with the estate owner, they are fiduciaries. That means they must, under the law, act in good faith and with sincerity, honesty, and loyalty. They must also bear the best interests of the estate’s beneficiaries.
Respect and Follow the Executor
As you learned in this personal representative vs. executor comparison guide, the former is an estate manager, while the latter is a type of personal representative. Regardless of their title, they have the same goal: to carry out a deceased person’s last will and testament.
So, if you ever find yourself in the presence of one because you’re a beneficiary, follow their instructions to a T.
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