We’ve all heard the story of a relative or friend passing without leaving behind a will (specific instructions regarding the distribution of their assets). Most individuals leave behind some assets upon their death, such as a home, car, or savings account. The distribution of these assets is a process known as probate. If no will is available to outline the decedent’s wishes regarding who receives what, Arizona probate laws kick in to make those decisions for them.
If there is a will, the process of distributing assets can be a very straightforward undertaking. But if there isn’t, professional legal guidance can be vital in helping navigate the Arizona probate process to ensure the estate’s business is handled properly and all parties are satisfied with its distribution.
If you are a beneficiary of an estate that is going through probate, or you have been tasked with properly distributing the assets on the estate’s behalf, here are 10 steps to the Arizona probate process with which you should be familiar.
Step 1: Initiate Probate and Prove the Will
If the decedent has a will, that document should identify the personal representative tapped to handle the estate. If no representative is named, or there is no will in the first place, the court will appoint a personal representative for the decedent’s estate.
There is a statutory order of priority used by the probate court to determine appointment of the personal representative (A.R.S. § 14-3203). In descending order, the list of priorities includes: a person nominated in the will, the surviving spouse of the decedent who is the decedent’s devisee, other devisees of the decedent, the surviving spouse of the decedent (who is not also a devisee), and other heirs of the decedent. A “devisee” is a person designated by the will to receive real or personal property.
In cases where the decedent was a veteran themselves, or the spouse or child of a veteran, the department of veterans’ services can be appointed. And forty-five days after the decedent’s death, any creditor may become the personal representative. Finally, if no other option is available, the public fiduciary may be appointed by the court.
Probate is initiated by the representative filing a petition for probate with the court, and the court, in turn, determining whether or not the will is valid before opening the probate estate.
Step 2: Obtain Letters of Administration
The court, upon deeming the will valid, as well as formally appointing the personal representative, bestows the appointed person with letters of administration. These letters of administration give the personal representative full authority to act on behalf of the estate.
The letters will be used by the personal representative to prove authority when handling the decedent’s affairs, such as accounting for all property, dealing with financial institutions, and paying taxes.
Step 3: Post or Waive Bond
Unless the will, the heirs, or the devisees waive posting bond, the personal representative will need to be bonded. In order to expedite this step, seeking a waiver is in the representative’s interest. This can be achieved by petitioning the court to modify the bond amount or waive the bond requirement completely.
If a bond is deemed necessary, either the size of the estate or an amount in the will can specify it. When no amount is specified in the will, or no will exists, the total value of the estate, in addition to any expected income generated by the estate during the next year, is used to become bonded.
Step 4: Provide Notice of Filing Probate Petition
The personal representative who files the petition for probate must also give notice of their application for informal probate to any person demanding it, as well as any personal representative of the decedent who has not had their appointment terminated.
Within thirty days of issuing a statement of informal probate, written information of the admission of the will to probate and a copy of the will must be provided to all heirs and devisees. This information must include the court where documents relating to the estate are on file, and outline that an heir has four months from receipt of this information to contest the probate.
Step 5: Take Possession of Estate Assets
Unless the will states otherwise, the personal representative can, but does not have to, take possession of all estate property as allowed by the Arizona probate code. In cases where certain property is already in the hands of those who are entitled to receive it, for example, the personal representative may decide to leave it there.
Similarly, if the personal representative finds it necessary to take possession of estate assets, under Arizona probate law, that is allowed in order to properly administer the estate.
Step 6: Locate, Appraise and Inventory Estate Property
Once probate officially opens, the personal representative must locate, appraise, and inventory all of the estate property. In the inventory, it is the duty of the personal representative to provide accurate information and details that describe the nature of the estate properties as either community or separate.
In addition, the inventory, which must be completed within 90 days of the personal representative’s appointment, must provide the fair market value of all properties. It must also outline any liens or encumbrances that exist on any of the estate properties. A copy of the completed inventory must be filed with the court or provided to all heirs of the estate.
Step 7: Pay Taxes
The personal representative must handle payments of the estate’s tax obligations in accordance with Arizona probate law. This includes estate tax, property tax, as well as any additional applicable taxes.
Step 8: Manage and Preserve the Estate
Entrusted with managing the estate, it is the personal representative’s duty to use the estate funds to pay for legitimate costs that arise and not spend money frivolously. It is their fiduciary duty to preserve the estate or risk becoming personally liable for any losses to interested parties if they breach this duty.
Though the personal representative can charge a reasonable fee for their own services and time, estate funds should be used to cover expenses such as attorney fees, court costs, and funeral expenses. Similarly, estate funds should be used to repay lenders or creditors if needed.
Step 9: Set Aside Community Property
In cases where the decedent was married at the time of death, the personal representative will have to set aside any community property for the spouse before determining division of the remaining property under the will or transferred under Arizona probate law.
Since Arizona is a community property state, and any property acquired during the marriage belongs equally to the married couple, accounting can become quite complicated for a personal representative without much experience in probate law.
Step 10: Distribute the Estate Property
The final step the personal representative is tasked with is the distribution of the estate’s property to the heirs, following repayment of any creditors and settling any tax issues. If there is a will, distributions of the remaining estate will need to be made in accordance with its terms. If no will is available, the personal representative must be guided by the Arizona probate code.
As you can tell from the outlined steps above, going through probate can be a difficult process. Consulting with an experienced Estate Planning Attorney and setting up an estate plan that outlines beneficiaries before ones passing, makes this process much easier on the beneficiaries down the line. Learn more about our estate planning services.
There are also situations that don’t require an estate to pass through probate, or situations where a special affidavit is enough for property to pass to the beneficiaries. In order to determine which legal options for navigating the complexities of the Arizona probate process are right for you, speak with our team at Joyce & Dubin, PLLC to get started.
Whether you are a personal representative, an heir, or devisee, unless you are an expert in Arizona probate law, this undertaking can be overwhelming. We can advise you every step of the probate process to ensure the estate is handled legally and to your satisfaction.