Advice for Trustees and Personal Representatives

Advice for Families and Fiduciaries going through a Probate or Trust Administration in Oklahoma

  1. Make detailed notes of all you do and the reasons you made your decisions. Quite often there will be opportunities for other family members and beneficiaries to question your decisions: “Why did you sell the house at that price?” or “Why didn’t you have an auction?” or “Where did you deposit the income from that rental?” If you have kept a detailed ledger of income and expenses, and if you have notes describing why you made those decisions, there is a much smaller chance that you will be called on to defend those decisions before the court and a much greater chance that your decision will be approved by the judge if you are called to answer on the witness stand. – For example – if you choose to sell a piece of estate property for $10,000 – it will be helpful for you to be able to identify the two real estate agents you met and talked to about the price and the expenses associated with selling that land.  A memory of two agents whose names you no longer remember, on dates that you can’t remember, is not as convincing as your detailed notes made at the time of the conversations.
  2. Do not mix your personal funds with money belonging to the estate or the trust. In Oklahoma the Personal Representative owes the estate a fiduciary duty to the estate; the duty to handle the estate affairs in the estate’s best interest and never put the Personal Representative’s interests ahead of the estate.  Do not borrow from the estate, and do not do anything that would make it appear as if you are treating the estate funds as if those funds belong to you.  You have a duty of full disclosure of your actions and the duty to exercise great care for the estate assets.  Create a separate checking account for the estate or use your attorney’s IOLTA account for the estate.
  3. Make a very serious effort to identify and locate good addresses for all of the creditors of the estate. One of the benefits of probate is that the probate law can drastically reduce the time that creditors have to make their claims.  In order to make that very short time limit apply and be enforced, you should identify the creditors and give them the notice required by law.  You can, and should search the decedent’s business files, forward their mail and watch for bills, look at the bank records for regular payments that may be for debts, and you may even need to pull a credit report.  If you fail to identify a creditor that could have been located with reasonable diligence, I expect that creditor will be able to overcome the defense you later try to raise on the basis of the Notice to Creditors you filed in the probate case.  That later claim may cause great hardship to the heirs and beneficiaries of the estate.  Remember – the hospital where the decedent passed away is presumed to be a creditor of the estate.  Be careful to tell your attorney all of the information you locate concerning those creditors.
  4. Inventory all assets belonging to the estate, and do it right away. The state law requires the Personal Representative of the estate to file an inventory of all of the estate assets.  This means that you should make an effort to list all that the estate owns and state your opinion of the value of each item or class of items.  My clients will often choose to list some assets and values somewhat generally; for example, kitchen appliances, pots, pans, dishes, flatware, and related items with a total estimated value of $xxx.xx If the items have modest value individually, I have never had any objection to such an inventory.  I would not, however, include any item (or set) valued over $500.00 in such a grouping. You should prepare and file the inventory soon after you are appointed as the personal representative.  If you are not certain that you have located all of the assets, file a preliminary inventory that lists what you do know as you can correct it later as the information becomes more complete.
  5. Expect that the heirs will be occasionally emotional, vulnerable, occasionally defensive, and maybe even offensive. When we lose a friend or family member that we loved, we become far more likely to remember old hurts and offenses. Things that would have meant nothing yesterday now bring tears and hard words.  Be prepared for that and compensate for it.  Speak more kindly than you feel. Be more flexible, more patient, more understanding, and give support even when it does not seem to be earned.  This extra effort will hold the relationships together and will reduce your attorney fees.  This is a result that is worth your effort.
  6. Seek and consider input from the heirs and beneficiaries. The Personal Representative (or Trustee of the Trust) makes the final decision in many events and transactions. That does not mean that the trustee or personal representative should ignore the input from other beneficiaries.  The wise course of action is to assure that the beneficiaries know that you heard them and understood their position, even if you decide on another course of action.  If all the beneficiaries, other than yourself, desire a particular action – you should seek counsel from your attorney.  Consider the possibility that you should concede their position.  To the degree that you can keep the peace, you are likely to reduce the attorney fees that are deducted from the estate. You will also reduce the chances that the Judge will appoint someone else to handle the estate.
  7. Do not hire novices. Whether you are choosing an attorney, an accountant, an auctioneer, or even someone to hold a garage sale for the estate, hire people who have handled matters like this before, preferably several times.  The potential savings that you hope or expect to realize when you hire a young or inexperienced service provider will almost never be realized.  Experience really is the best instructor.  The Oklahoma Supreme Court has been known to say that parties to a lawsuit choose their attorney at their own peril.  Choose wisely.
  8. Do Not Buy Things From the Estate. Oklahoma law prohibits the purchase from the estate by the personal representative and her spouse.  If you want to buy something from the estate, don’t serve as the personal representative.

 

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