Restraint of a Personal Representative Pending Removal

A recent comment asked a very good question – essentially what happens to the Personal Representative after someone has asked the court that they be removed, but before a hearing has actually been held on the matter? The answer to this question can be found in South Carolina Code §62-3-611 which states in relevant part, “after receipt of notice of removal proceedings, the personal representative shall not act (emphasis added) except to account, to correct maladministration, or preserve the estate.” In reading this statute, it seems clear that upon service of pleadings to remove a Personal Representative, the P.R. really shouldn’t be acting as P.R. except in the specific instances provided. That being said, a large majority of Personal Representatives as not represented by counsel or their counsel is unaware of this language and therefore I always recommend the following:

First, in your Petition to Remove, clearly state that you want the court to restrain the Personal Representative from acting under this section. In many courts, the court itself will send a standard Order Restraining Personal Representative back with your pleadings so that you can serve the Personal Representative with the same.

Second, if you have serious concerns or need to ensure that an act is stopped immediately (for example a closing on a piece of real property or a disbursement that is about to be made), I also suggest you include in your Petition to Remove a specific request under §62-3-607 which asks the court to restrain the Personal Representative and include in parties anyone involved in the transaction of concern. This statute states:

Order restraining personal representative.

(a) Upon application of any person who appears to have an interest in the estate, the court by temporary order may restrain a personal representative from performing specified acts of administration, disbursement or distribution, or exercise of any powers or discharge of any duties of his office, or make any other order to secure proper performance of his duty, if it appears to the court that the personal representative otherwise may take some action which would jeopardize unreasonably the interest of the applicant or of some other interested person. Persons with whom the personal representative may transact business may be made parties.

(b) The matter shall be set for hearing within ten days or at such other times as the parties may agree. Notice as the court directs shall be given to the personal representative and his attorney of record, if any, and to any other parties named defendant in the petition.

Including this request in your Petition to Remove Personal Representative not only clearly indicates to the court that you want the Personal Representative fully restrained, but also gets you an appearance before the court quickly (ten days according to statute). The initial hearing will likely only be on the restraint but will give you an opportunity to express to the court your concerns.

If your petitions are not clear in these requests, it is highly likely that the Personal Representative will continue about their daily business. Even worse, they could respond to the request for their removal by believing that if they are going to be removed, they might as well go ahead and do what they want before the formal hearing. A good probate attorney will always use these sections to ensure there is no confusion as to what should and should not occur between the date of the filing of the removal action and the appearance in court.

 

Important Note: Effective January 1, 2014 there were substantial changes in South Carolina’s Probate Code. While we’ve tried to update this blog, please note the date of blog posts and send us an email or call for a consult before relying on information written prior to January 1, 2014. We appreciate your understanding.

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11 Responses to Restraint of a Personal Representative Pending Removal

  1. Kevin says:

    I think in my case it could be argued that the Personal Rep is acting to preserve the Estate, less the emanate Foreclosure of the Real Property occur before the Short Sale is completed.

  2. There is definitely room for that argument. Especially if foreclosure is looming and there are not assets available to preserve the estate. The biggest concern in these foreclosure cases is when there are assets to pay the mortgage but the Personal Representative has simply chosen not to apply them. You also have to look at whether the real estate in question is part of a specific gift to one person (devisee) by will or is just part of the remainder of the estate. If the attorney who filed the action to remove did not specifically request restraint then I think the Personal Representative has a good argument that the short sale is “preservation” under the S.C. Code.

    Thanks again for reading the blog!

    Tiffany

  3. Kevin says:

    Tiffany,

    The real property is just a remainder of the Estate which the Personal Rep had power in the will to dispose of and their are not sufficient assets within the Estate to cure the loan.

    I will have to take another look at the action filed.

    Either way this property is being disposed of by a Foreclosure or a Short Sale.

    Thanks again,

    Kevin

  4. Kevin says:

    Absent of of a Retraining Order – FORM #330PC, can the Personal Rep still perform the Powers granted in the Will as it related to Selling of Real Estate?

    Unless a petition in a formal testacy proceeding also requests confirmation of the previous informal appointment, a previously appointed personal representative, after receipt of notice of the commencement of a formal probate proceeding, must refrain from exercising his power to make any further distribution of the estate during the pendency of the formal proceeding. A petitioner who seeks the appointment of a different personal representative in a formal proceeding also may request an order restraining the acting personal representative from exercising any of the powers of his office and requesting the appointment of a special administrator.

    In the absence of a request, or if the request is denied, the commencement of a formal proceeding has no effect on the powers and duties of a previously appointed personal representative other than those relating to distribution.

  5. Kevin,

    This question and code are actually referring to something different. When an estate is pending a formal proceeding to determine who should be Personal Representative due to multiple wills the same presumptions don’t arise as when the proceeding is to remove a Personal Representative for wrongdoing. Different standards are applied.

    In your original question, you implied that the Personal Representative you are working with was facing a REMOVAL proceeding, which triggers §62-3-611 and the “shall not act” language. In that situation, the court’s goal is to have the serving Personal Representative not act other than to specifically protect the estate or correct their maladministration.

    The comment immediately above is referring to a situation where one Personal Representative is serving under a will, but another party has brought forth a different will which might change who has the right to serve. In this case, the court is not as focused on restraint as it is not presumed the current Personal Representative is doing anything wrong . . . just that they might not be the person with priority to serve. In either case, the law is clear that no distributions should take place.

    I hope that helps explain the differences in these two proceedings.

  6. Kevin says:

    Tiffany,

    Thanks for your response. Would the sale of Real Estate where there are no proceeds from the sale be considered a ‘distribution’? It seems to me that in the matter I am referring too the Personal Rep would be acting to protect the Estate from Foreclosure and the possible consequence’s.

  7. A sale in lieu of foreclosure is going to be viewed differently by different Judges. It’s hard to predict. If the PR can show that there genuinely were no assets to pay the debt associated with the property and that the sale was the ONLY option other than foreclosure, then I believe it would be considered “preservation” as opposed to “disbursement.” Generally speaking, disbursement refers to the process of paying out funds, either to their rightful owners (by will or intestate law) or an unlawful disbursement would be giving assets to someone who is not entitled to them.

    Again, I agree that in this situation (from the limited facts I have) that there is a strong argument that the sale is “protection” of the estate; however, after 11 years as a Judge I have learned that there are always two sides to every story and therefore it’s the court’s responsibility to hear both and determine what is/is not permissible. The good news is that our S.C. Code offers significant protections for the BUYER of the property in this situation.

  8. KC says:

    Can a personal rep forcefully take over a grantors/trustees checking account in SC?

  9. It’s not possible to answer this question without more details. Is the trust in question related to the estate (i.e. created by the Last Will)? If not, it’s difficult to determine how a PR can take over an account unless the account was held jointly with the decedent.

  10. Russ DeMott says:

    Great advice regarding he interplay between foreclosure issues and probate.

  11. Thad Sheard says:

    Great article. Law has always interested me.

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