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Saturday, November 19, 2011

Personal Representatives, Family Feuds

 

“It’s time to play the Feud!”  If that phrase does not conjure up some type of emotional reaction out of you, then you probably have not turned a TV on in many years (or you’re dead inside). The game show Family Feud has been gracing the television air waves since 1976.  It is mildly surprising that a show which pits two families against each other by requiring them to guess the most popular answers to survey questions has been able to stick around for so long.  The appeal of Family Feud is not the silly hosts and the snappy music, although that is certainly a contributing factor to its brilliance, it’s the families.  Family members working together in perfect harmony, often times even huddling like some type of weird family football team, occupy a special place in the American consciousness.  Families become stronger in their unified quest for cash. The viewers yearn for that type of family connection.

Sadly, in the real world, the opportunity for cash or other assets drives many families apart.  The most common situation where family feuds arise is estate disputes.  It is common for a family member to be the personal representative (commonly known as the executor) of the estate.  The personal representative is the person charged with administering and distributing the estate and is similar to the trustee of a trust.  The law imposes certain duties on the personal representative, and if the duties are not met the personal representative may be personally liable to the beneficiaries of the estate.

One common pitfall personal representatives fall into is the self-interested transaction.  Mom and dad die leaving the family farm in equal shares to the sole heirs, brother and sister.  The will is silent as to who operates the farm.  Sister is the personal representative and buys the farm from the estate.  Brother sues sister because he believes he was supposed to run the farm and disagrees with the purchase price paid by sister.  Sister could have avoided this situation if she obtained brother’s approval in advance or if she obtained court approval before the sale.  Mom and dad could have avoided the situation if they had provided specific direction about the operation or sale of the farm in their wills.  

Personal representatives are required to deal with estate assets as a “prudent” person would deal with the property of another.  The problem with prudence in most situations is that the personal representative is not “dealing with the property of another,” but the property of a loved one.  Personal representatives have to deal with family members, some of whom are likely resentful because they were not the ones chosen to be the personal representative.  It is easy for the personal representative to become a scapegoat of the other family members.  A personal representative should hire counsel to help navigate this process if for no other reason than lawyers excel at being scapegoats.  Most of us even do so with a smile.

So what is the best way to get back at a child who gave you the most difficulty in raising him?  Survey says – make him the personal representative of your will.

Jeff Brunson is an attorney and shareholder at Beard St. Clair Gaffney PA.  Jeff is a trial lawyer who specializes in business disputes and estate litigation.  He can be reached at his Rexburg office (208) 359-5883 or jeff@beardstclair.com

Staff at 2:47 PM
Estate Planning
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