Estate & Trust Administration

Estate Administration

After the death of a loved one, his or her estate needs to be collected and managed, this process is called Estate administration. Estate Administration involves gathering the assets of the estate, paying the decedent’s debts, and distributing the remaining assets. The exact process to administer an estate depends on the amount of planning that was done, whether there was a revocable trust or last will and testament. It depends on the value of assets that are in the estate, and how they were titled. If there was a revocable trust in place there are requirements to administer the trust, these requirements are in the actual trust document itself along with statutory requirements from the Arizona trust code. If there is not a trust or if there are assets that were not titled in the name of the trust a Probate may be necessary to collect the assets of the estate. During your family Administration session your attorney will identify what process or processes are required to settle the estate.

If you are the person named as the Successor Trustee in the revocable trust or if you are named as the personal representative (commonly referred to as “executor”) in the last will and testament it is wise to seek counsel to help you administer the estate. As the Trustee or personal representative you are personally liable if you fail to properly administer the estate. This means that you can be sued and lose your personal assets if you do not act properly. The Trustee and personal representative our entitled to fees for their service. We generally recommend that they take the compensation because they have a serious job to do and it is important that it is handled properly. It is less common for the beneficiaries of an estate to need their own attorney. A beneficiary is a person that is entitled to inherit assets from the trust or estate. You can hire us to represent you as a beneficiary if you think that the Trustee or personal representative is not following their duty.

Trust Administration

We will provide those services that are necessary and appropriate to administer the trusts under the laws of the State of Arizona. The normal Trust Administration services include the following:

  1. Advise you with respect to your fiduciary duties as Trustee and help you to collect, protect
  2. Assist you in determining the cost basis and date-of-death values of the assets;
  3. Prepare a complete inventory of the assets and determine whether there are any assets that and will require collection through a probate proceeding;
  4. Prepare and complete all reports and notices to the beneficiaries as required by the terms of the trusts, state law and federal law;
  5. Discharge any potential creditor claims pursuant to state law;
  6. If Necessary, create sub-trusts for the beneficiaries of the trusts;
  7. Help administer the retirement accounts (IRA’s 401k’s etc.) and help you get the maximum tax stretch possible.
  8. Assist in making distributions to the beneficiaries named in the trusts
  9. Obtain the necessary releases from each beneficiary to protect the Trustee from potential fiduciary liability;
  10. Prepare the required reports, notices, consents, receipts, waivers, releases, and accountings for closing the administration and discharging you as a fiduciary; and
  11. Provide counsel and advice on any related questions or matters arising out of the administration of the trusts.

Small Estate Administration

On some occasions, a probate may not be necessary and an estate can be settled by small estate administration. In Arizona, when personal property is less than $75,000 and equity in real property (real estate, such as a house) totals less than $100,000, small estate administration is an option and probate may be bypassed. These procedures can be much less burdensome and time consuming and therefore is less expensive than filing a probate. So the first thing a PR should do is decide whether the estate should be admitted to probate, or whether it can be collected through small estate administration. Your attorney will let you know if this is an option during your Family Administration Session.

Probate

  • What is probate?
    • Probate is the judicial process by which a court gives an order to retitle assets held solely by a deceased individual. If a will was prepared, the court will order the assets to be retitled according the will. If there is not a will then the state “laws of intestacy” determine the beneficiary

The first step in a probate is to file to “open” the probate

When a will exists, the personal representative (“PR”) will submit the will to the court to verify that it is the most recent, and is valid.  If there is no will (the decedent dies “intestate”), the courts determine how an estate will be distributed, referring to the state’s laws of intestacy. In Arizona, the laws of intestacy can be found in Chapter 2 of Title 14 of the Arizona Revised Statutes. A.R.S. 14-2102 covers the share of a surviving spouse, and can provide background as to how an estate will be divided in the event a loved one passes intestate. Other statutes within the chapter can provide additional context for more specific situations, but we advise consulting with one of our licensed attorneys in order to interpret the law.

After the probate is opened the judge will issue “personal representative letters”, which is a document that gives the personal representative the authority to act for the estate. Showing the “Personal representative letters to the bank will give you the authority over the accounts that were held in the name of the decedent. The probate will remain open in order to alert creditors that they need to settle their claims, and identify the beneficiaries who will receive a portion of the estate.

There are some required waiting periods and several different steps to complete a Probate so it can take a long time. A probate normally takes between six to twelve months to complete.

During the probate period the representative collects information for the deceased’s accounts and property. A representative is required to post notice to creditors who may have claims, pay the deceased’s debts and taxes with estate funds, and administer distributions to beneficiaries.

Upon completion of probate, when all debts and taxes of the deceased are paid, and creditors have been satisfied, the court will allow for a distributions to be paid out to the beneficiaries and then the probate can be closed.

The probate process can be timely, and a burden at a time when families already face emotional obstacles. At Dana and Associates, our Attorneys can help you through the process of probate, and make sure that your duties as a personal representative are fulfilled.

 

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Phoenix, AZ 85050