Once a Personal Representative has located the assets belonging to the Decedent, they must act immediately to protect, secure, and evaluate certain of these assets. This is one of the most important responsibilities of the Personal Representative. Failing to do so may subject the Personal Representative to personal liability. And sadly, as is too often the case, many people in their last months of life neglect the safekeeping of their property, and these assets become more vulnerable to theft and loss following the Decedent’s death.
If you live out of Pennsylvania, then it may be best to consult with an attorney or trusted relative or friend to assist you with some or all of these tasks.
In general, the assets of an Estate can be divided into two groups: probate assets and non-probate assets. Probate assets pass through the Estate before they are distributed to the heirs. Non-probate assets pass outside of the Estate. Some of these assets may require your immediate attention.
1) The Decedent’s Personal Residence
Real properties include the Decedent’s personal residence and commercial properties, such as rental and business properties. The Personal Representative should move quickly to ensure that all of these properties have adequate insurance coverage to protect against casualty losses for such events as fire, water damage, and personal injury claims by others who may be injured on the property. If the property is vacant, the Estate may need to purchase special coverage to protect against these losses.
By this time, the personal residence should be secured so as limit the possibility of vandalism and theft. Alarm systems should remain activated, where possible. Utility bills should be monitored and paid to prevent unanticipated utility cut-off. In many cases, it may make sense to winterize a vacant property so as to limit the possibility of water damage.
Of course, it is important to determine how each property is titled. There are many situations where real estate is held in the names of more than one person or in the name of a partnership or corporation. Properties that are titled in the names of more than one person may also require the attention of the Personal Representative. In this circumstance, it is best to consult with an attorney in order understand the rights and responsibilities of the Personal Representative.
A search of the county records should be initiated if you think there are properties owned by the Decedent that may be subject to a foreclosure action. Local License and Inspection records should also be reviewed to determine if there are outstanding code violations or upcoming assessment proceeds scheduled.
2) Rental and Business Properties
Rental properties create their own set of challenges. Since there are so many different scenarios associated with rental properties, it is difficult to summarize the responsibilities of the Personal Representatives in each situation. In general, however, the Personal Representative or their attorney should be familiar with the local and state landlord-tenant laws and regulations. The properties should be inspected to ensure that they are in a safe condition. A casualty policy of insurance should be in place.
A copy of the current lease for each tenant at each property should be obtained, and the terms of the lease should be reviewed. Special attention should be paid to the length of each lease, since there may be an upcoming renewal for a tenant. There may be special provisions that relate to the death of the Landlord. If required by the lease, common areas of multi-family properties may need special attention. In general, leases should not be renewed until the Personal Representative decides how the property will be disposed of. Vacant units may require additional attention. Rent should be collected and checks should be deposited into the Estate account, which should be opened as soon as possible. Care should be taken to locate the accounts where the Decedent held the security deposits of their tenants. Careful record-keeping of all Estate transactions is critical.
3) Personal Assets
Many Estates will include personal items of sentimental value, such as family photographs and items of high value, such as antiques, jewelry, and art work. The Personal Representative should check to see if the Decedent maintained an insurance policy for personal items of value. These items require attention early, and it is important to move quickly to protect these items from deterioration and theft. This may require you to remove these articles to a safe deposit box or other secure location. Sentimental items should also be secured in a safe manner.
4) Other Assets
In addition to the Decedent’s residence, business properties, and personal items, the Personal Representative will most likely need to locate a variety of other assets that were owned by the Decedent, such as bank accounts, brokerage accounts, stocks, bonds, pension funds, IRA Accounts, life insurance policies, and the like. Some of these assets will belong to the Estate, while others will pass to certain third parties outside of the Estate. And some of these assets, such as IRA and other retirement plans, may require early attention.