Contracts Entered on Behalf of the Estate
Managing an estate often requires signing contracts: hiring appraisers, listing real estate, engaging accountants, or retaining contractors. Arizona law protects the personal representative from individual liability on these contracts, but only if they follow one important rule.
Unless otherwise provided in the contract, a personal representative is not individually liable on a contract properly entered into in his fiduciary capacity in the course of administration of the estate unless he fails to reveal his representative capacity and identify the estate in the contract.
A.R.S. § 14-3808(A)The key is disclosure. When signing any contract during estate administration, the personal representative must clearly identify themselves as acting on behalf of the estate, not in their personal capacity. Failing to do so can shift the obligation from the estate to the representative individually.
Torts and Ownership Obligations
The personal representative may also face claims related to property the estate owns or controls. If a tenant is injured on estate-owned rental property, or if estate operations cause damage to a third party, the question of liability depends on personal fault.
A personal representative is individually liable for obligations arising from ownership or control of the estate or for torts committed in the course of administration of the estate only if he is personally at fault.
A.R.S. § 14-3808(B)Without personal fault, these claims are against the estate itself, not the representative. However, when the representative's own negligence or misconduct causes the harm, they can be held individually responsible. Disputes about whether liability belongs to the estate or the representative personally can be resolved through a court accounting or surcharge proceeding.