Named As Personal Representative in Will

[sweetsncheese]

My question involves estate proceedings in the state of: Michigan

I have an elderly friend who has me listed as his "personal representative" in his will. He is married, no children. His will reads that his estate will be given to his wife if she survives him (she's not in the greatest health). Then, it lists me for 'all the rest, residue and reminder of estate' if wife predeceases him. In the will it also states that he directs 'all my just debts, including the expense of my last illness and funeral expenses, and the expense of administering my estate, be paid by my "Personal Representative" as soon after my decease as may be convenient'. This is the part that makes me nervous.

To give more of a backstory and their assets vs liabilities as I know of them - they own a small ranch home with no mortgage (worth ~$35k in a Detroit suburb). She has about $9k in a savings account; he has about $250. They each have life insurance but I don't know how much. He also has about $15k in credit card debt. As far as I know, this is all they have other than monthly income from SS and a small pension. They get by okay but rely on credit cards for unexpected expenses with their home and some prescription drugs.

So...with all this said, is there a way that i can minimize any liability or risk to me in the long run? I'll give a scenario as an example: she dies first (some more credit card debt is added due to her funeral costs, etc.), then he dies....then I find out he has $40k debt....and I'm still responsible for his funeral and maybe some other debt due to him being sick before passing, etc. etc. While I could be flattered that he has left me in his will, I also don't want to be burdened with a ton of debt that I need to pay on his behalf, nor can I afford that scenario.

I have told him recently that I'd like to sit down with him and help him write down all his bank account, life insurance, funeral wishes, and other information that will help me so he's pretty easy to talk to - just don't know what else to do to help me too in all this - I'd appreciate any suggestions. Thank you.

[harrylime]

As the Personal Representative, you are not personally liable for the debts. (Unless you try to stiff a legitimate creditor.) As the residual beneficiary, you are not personally liable for any debts. Expenses and creditors are paid before any beneficiary receives any assets.

The Michigan Probate Code establishes a priority of payment if the estate assets are insufficient to pay all claims:

700.3805 Priority of claim payments; insufficient assets.

Sec. 3805.

(1) If the applicable estate property is insufficient to pay all claims and allowances in full, the personal representative shall make payment in the following order of priority:

(a) Costs and expenses of administration.

(b) Reasonable funeral and burial expenses.

(c) Homestead allowance.

(d) Family allowance.

(e) Exempt property.

(f) Debts and taxes with priority under federal law, including, but not limited to, medical assistance payments that are subject to adjustment or recovery from an estate under section 1917 of the social security act, 42 USC 1396p.

(g) Reasonable and necessary medical and hospital expenses of the decedent's last illness, including a compensation of persons attending the decedent.

(h) Debts and taxes with priority under other laws of this state.

(i) All other claims.

(2) A preference shall not be given in the payment of a claim over another claim of the same class, and a claim due and payable is not entitled to a preference over a claim not due.

(3) If there are insufficient assets to pay all claims in full or to satisfy homestead allowance, family allowance, and exempt property, the personal representative shall certify the amount and nature of the deficiency to the trustee of a trust described in section 7605(1) for payment by the trustee in accordance with section 7606. If the personal representative is aware of other nonprobate transfers that may be liable for claims and allowances, then, unless the will provides otherwise, the personal representative shall proceed to collect the deficiency in a manner reasonable under the circumstances so that each nonprobate transfer, including those made under a trust described in section 7605(1), bears a proportionate share or equitable share of the total burden.

[sweetsncheese]

Thank you very much for the reply - great information for peace of mind.

One more question - would my elderly friend benefit in any way of having a trust, as oppose to this will? They don't really have a whole lot but just wondered if a trust would benefit anything in his case. Thoughts?

- - - Updated - - -

And...is there a checklist of sorts I can find online that will allow my friend to list all his assets, liabilities, bank account information, funeral wishes etc? I'm not having much luck finding anything.

[Foster_Foster]

I wouldn't get into the notion of whether his estate planning choices are good; it's up to him to address that.

The wife's assets aren't relevant to the equation of his estate. Expenses for funeral and admin of estate would come before any unsecured debt like credit cards. If there's not enough money to cover it all, it is what it is. When the time comes, you'd seek local estate-probate counsel vs. trying to figure this out by yourself; it's not a good DIY project.

As for a checklist, I'm not clear why you'd need a form. While you're free to ask him to draw up a list of X-Y-Z, note that what is true today may not be true next week (though things like bank account info and funeral wishes don't change with the breeze).

By the way, please understand that you're under no legal obligation to accept the job to administer this person's estate.

[sweetsncheese]

Thanks for the response Foster. I guess I don't need a form; I'll just have him list all his information just so everything is listed. My father died a few years ago and had everything laid out on a list - was very helpful.

When you say I have no legal obligation to accept the job to administer his estate - what do you mean exactly? Is this something that I communicate to him? Or, is it something I could communicate to probate if I felt, at the time of friend's death, that do not wish to partake in the 'personal representative' duties?

[harrylime]

Is this something that I communicate to him? Or, is it something I could communicate to probate if I felt, at the time of friend's death, that do not wish to partake in the 'personal representative' duties?

If you are certain now that you do not wish to serve as the PR, it would be a good thing to communicate to your friend so that he can make other arrangements.

If, after he passes, you decide that you don't want to serve, you can decline the nomination.