A person who takes on the responsibility of serving as an estate representative may not understand the risks involved. These risks are serious and should not be underestimated when deciding to serve.
All representatives take on the risk of personal legal and financial liability for any negligence during the administration process. Legal risks mean that the representative can be sued by estate beneficiaries, creditors and government agencies for mistakes in handling debts and claims, even inadvertent mistakes. When a party who believes their rights to the estate have been violated, the disappointed party may bring a legal action to enforce their rights called a surcharge action. These legal matters arise when a party was not paid what they believe they should have received from the estate. A good example would be the Commonwealth of Pennsylvania suing the representative for failing to make request for and pay a Medicaid lien before distribution.
Unfortunately, the risks do not end with the hassle and expense of defending lawsuits. The other more serious risk is personal financial liability. Some are shocked to discover that the law holds a representative personally responsible for mistakes in estate administration. This means that the representative’s own assets can be targeted by any party who was unhappy with the way the estate was closed. Even in situations where a claim is resolved favorably, the mishandled situation can lead to delays in closing the estate.
