The executor or personal representative of a Louisiana estate has a difficult job ahead. It is their responsibility to initiate succession proceedings in court. They have to communicate with beneficiaries, heirs and other interested parties.
The personal representative of a Louisiana estate has a fiduciary duty to heirs or beneficiaries and also a degree of legal liability if they make mistakes while fulfilling their responsibilities. There are certain issues that could potentially lead to litigation and financial liability for the person overseeing the estate of someone who recently died.
Tax responsibilities
Estate taxes can be a major burden for an estate to cover. Although Louisiana does not collect an estate tax, large Louisiana estates are potentially subject to federal estate taxes. The personal representative has to retain resources to cover estate tax obligations.
They also have a responsibility to fulfill the decedent’s personal income tax obligations. Typically, a personal representative has to file a tax return on behalf of the deceased individual. They may also have to pay income taxes on behalf of the estate itself. The failure to file property tax paperwork and retain the state resources to fully cover tax responsibilities might result in personal financial liability for the representative.
The debts of the decedent
Technically, the debts owed by the decedent are the responsibility of the estate. Other people only have direct responsibility for those debts if they are cosigners on a particular account. That being said, it is the responsibility of the personal representative to communicate with creditors, publish notice of succession proceedings and retain estate resources to pay all valid debts. In scenarios where a personal representative distributes assets from an estate and then cannot pay valid debts, they may end up personally accountable for the mistakes they made during estate administration.
Inappropriate asset management
Estate administration typically requires the management of various assets until it is the right time to sell them or distribute them to beneficiaries. In scenarios where estate beneficiaries can prove that a personal representative embezzled or caused major losses for the estate through improper management resources, they might take legal action against the representative.
Litigation could lead to not only the representative’s removal from their role but also the imposition of financial liability. They may have to reimburse the estate for the value of resources they misappropriated or lost due to decisions. Personal representatives have a lot at risk during estate administration and may benefit from the guidance of lawyers familiar with Louisiana’s succession laws. Connecting with the right assistance early in the succession process can help representatives limit the liabilities that come with their role.
