Estate Administration
Helping Managers Manage
Probate in Arizona consists of three phases: appointment, administration, and closing.
Appointment is the process of getting someone placed in charge of the assets, debts, and legal relationships of the person who passed away (called the "estate"). The word "probate" comes from the Latin word for "proof" and the first thing that must be proved in a probate case is that the person who wants to be in charge is the person who should be in charge. Arizona law provides for two methods of doing this: informal probate (which proceeds without a hearing) and formal probate (which requires a hearing before a probate judge). Both kinds require notice to other people who are or might be interested in the estate. The exact requirements of notice differ slightly depending on the case but in general, any one who stands to inherit (and in a formal probate, the people who would have inherited if there had not been a will) are entitled to notice. This step is probably the most difficult part of the appointment phase so it may be a good idea to get help from an Arizona probate lawyer.
Informal probate is only available in certain situations and to people who had specific relationships to the person who passed away. The two situations in which informal probate is allowed is when the original will can be presented to the court for review or if the person who passed away never created a will at all. In most cases, the people who are allowed to request an informal probate are: 1) the person's spouse, 2) the person's children, parents, or siblings, 3) an heir, or 4) the person(s) named in the person's will as the estate administrator (usually called "personal representative" in Arizona). If the person who passed away had a will but the original cannot be found, or if the person who is asking to be placed in charge of the estate didn't have one of the required relationships to the person who passed away, the appointment will probably need to done with formal probate.
In a formal probate, the person seeking to be placed in charge of the estate must file a petition with the court explaining why they should be appointed. Unless there are specific circumstances that justify choosing someone else, the person who has priority for appointment as personal representative will normally be the person who is chosen for the job. Title 14, section 14-3203 defines the priority order for all probate cases as: 1) the person listed named as administrator in the will, 2) a surviving spouse who stands to inherit some assets in the will, 3) other people who will inherit under the will, 4) a surviving spouse, 5) other people who will inherit through intestacy . If none of these people are able or willing to serve, a third party such as a creditor or government official may serve as personal representative.
Once a personal representative is appointed, the work of wrapping up the affairs of the person who passed away can begin. Depending on the case, administering the estate may be as simple as collecting funds and distributing them or it may require months or even years to tie up all the legal and financial loose ends that a person left behind. In every case, though, the personal representative is required to do two things: notify actual and potential creditors and create an inventory of estate assets after they are appointed. By giving notice to creditors, the personal representative starts a clock running which gives people who want to collect debts from the estate 4 months to submit their claim. Because the inventory is due only 90 days after the administrator was appointed, the initial inventory is often a rough estimate based on incomplete information. Before the case can be closed, however, the personal representative is required to make a more precise accounting to all of the people who will inherit.
Once all of the costs of administration (which can include compensation for the personal representative and people who support them), as well estate debts and taxes have been paid, the process of closing the estate begins with the personal representative distributing the remaining assets to the people who are supposed to inherit them. A well drafted will makes this task very simple by stating in clear terms who should receive what. Sometimes a person's will is less clear, or there is no will at all, and in those cases the personal representative must do their best to make a fair distribution consistent with the will (if any) and the circumstances, which can require court intervention or mediation. Once all of the assets have been distributed, the case can be closed in either a formal closing or an informal closing, called a "closing statement." A formal closing requires a hearing before a probate judge and is typically used if there are disputes about the administration or other unresolved issues. Most of the time, though, the personal representative can submit a closing statement instead. This document puts everyone on notice that the personal representative considers their job to be done, and as long as no one files an objection, the court will end the appointment of the personal representative and close the case.
Administering a trust can proceed similarly to managing an estate in probate, or it may be very different, depending on what the trust says. The trustee is required to give notice to the beneficiaries, pay legitimate debts, and distribute assets as provided in the trust, but the specifics vary from one trust to another. However, the work required to implement a trust will be usually be significantly simpler than a probate estate and will require less time and fewer fees. Because the requirements of the trustee's job can vary so much from one trust to another, there are fewer public sources of information available to help trustees than for personal representatives, so the guidance of an experienced Arizona trust attorney can be a big help.
