Upon the court's appointment, the personal
representative becomes an officer of the court and takes on certain duties
and responsibilities. These duties and responsibilities include managing the estate's assets. Estate assets
must be managed with the care of a prudent person dealing with someone else's
property. The prudent person rule requires that the fiduciary or
the personal representative exercise discretion and average
intelligence in making investment decisions.
Accordingly, the personal representative should be
cautious about making risky or speculative investments and may be liable for
losses obtained in such kind of investments. Estate assets must be kept
separate and not commingled with anyone else's, including that of the personal
representative. Bank accounts, securities and other assets must be held in a
name that shows that they are estate property and should not be held
under the name of the personal representative.
Estate accounts must earn interest and may be kept in
insured accounts in financial institutions, except for checking accounts
intended for ordinary administration expenses. The estate's money cannot be
spent without the court's approval. However, reimbursements can be made for
official court costs paid by the personal representative to the
county clerk as well as for bond premium. Money taken out of the estate without
the court's permission may result in the personal representative's removal
and/or reimbursement to the estate from the personal representative's own
personal funds.
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