As you mourn a loved one, you must also be wondering about “probate,” the process of resolving a decedent’s estate. Perhaps you were named in a will. Maybe you were even designed in a will to be the estate’s “personal representative,” but you’re still wondering what that all means. You want to know if you should take care of an estate yourself, get others to help on particular issues, or hire an attorney to handle the entire estate.
Probate can be a complicated and lengthy process, and an attorney can make all the difference. But to understand why that’s the case, let’s review some of the basics of probate administration.
A Quick Overview of Probate:
You may already have heard that there are a few ways to handle probate in Arizona. If probate is required, Arizona law provides three forms of probate: Informal Probate, Formal Probate, and Supervised Probate. Informal probate allows for an estate’s personal representative to act fairly autonomously, while formal probates require more involvement with the court to litigate the estate. In a supervised probate, the personal representative cannot act without the court’s review and approval.
Probate may also require addressing guardianship of minor children or those not able to care for themselves; however, the issues relating to guardianship go beyond the scope of this article.
Who Can Be a Probate Administrator
The first—and crucial—step in probate administration is the designation of the estate’s personal representative (who is known, in other states, as the “executor”).
The statute specifies who is eligible to be a personal representative (e.g., someone named as the representative in the will, a surviving spouse).
The personal representative will act on behalf of the estate, appearing in court on the estate’s behalf, distributing assets to the heirs, and paying creditors.
Individuals must take a short course and then file an official acceptance of the position with the court. Once it’s been approved by the court, they must send a notice of their appointment to known heirs and creditors.
Whether the personal representative is a family member, a friend of the deceased, or a professional, the estate pays the personal representative for their time and expenses.
Initial Responsibilities
As well as notifying interested parties of the personal representative’s appointment, the personal representative must publish death notices (e.g., place advertisements in newspapers notifying the public of the decedent’s passing). They must identify creditors, notify them of the decedent’s passing, and get their potential claims against the estate.
They must also determine who the heirs are. They may be named in a will, or, if the decedent died without a will, Arizona law specifies who should be the heirs.
Managing the Estate Assets
Since probate can take months or even longer than a year, the personal representative must also protect and maintain assets during probate. To do this, the representative should get an EIN to manage and report the estate finances.
The representative then needs to identify and inventory all assets. This includes both real property, personal items, as well as financial assets (e.g., checking and savings accounts, money market accounts, pensions, and contents of safe deposit boxes).
While educated guesses of values are acceptable in some circumstances, hiring a professional appraiser is important—especially if items are to be distributed “in kind” (i.e., the will specifies that an heir receives a particular item), since these items must be professionally appraised within 30 days of distribution.
If the personal representative learns of property that is to be transferred upon death, they need to distribute those assets.
For the remaining assets, the representative then should “marshal” these accounts—the process where they notify the bank or affiliated institution of the decedent’s passing. They further clarify their role as the estate’s representative and retitle the assets in the estate’s name.
At this point, heirs are notified of the asset and debt inventory.
If the heirs want to contest the will or the asset inventory, they can file suit. At this point, the probate becomes like most other lawsuits. There will be the discovery of written documents, depositions of witnesses, and so on until the case is tried in court.
During this process, the personal representative will act on behalf of the estate (unless part of the suit is directed against the representative).
Disbursement of Assets
Assets are distributed according to the will, or in the absence of a will, statutory requirements.
The personal representative will also use the assets to pay legitimate creditors. To do this, the estate first pays for the expenses of probate itself, then the funeral and medical expenses. Then, the estate will pay out any taxes and then all other debt claims.
Closing the Estate
To close the estate, the personal representative must submit a last tax filing on behalf of the decedent’s estate.
They will file a closing statement with the court, confirming the disbursement of the assets and resolution of other issues.
If there is a substantial delay in filing the closing, the representative may need to go to court to appear at a hearing if there is no closing statement.
While we have reviewed some of the major issues and stages of probate administration, we have just scratched the surface of probate administration. Even for informal probate, the procedure is still a technical—and emotional—process that can take a toll on a decedent’s loved ones.
That’s why if one of your loved ones recently passed away, call professionals to see how they can help you navigate the process and procedures. Contact our office (by phone at: 602-548-3400) for a confidential consultation with one of our attorneys. Don’t wait. Call today.
Brian Winter is a family law and estate planning attorney in Phoenix, Arizona. Mr. Winter is a partner with Stewart Law Group with offices throughout Arizona. The firm has helped many clients navigate the legal complexities of estate planning, wills, probate, divorce, child custody, spousal support, property division, parental visitation, and child relocation disputes.
