Probate and Trust Administration
In addition to helping our clients create Estate Plans, Udall Shumway also assists clients with Estate Administration. Estate Administration, which includes the statutory framework commonly known as probate, is the process by which a decedent’s affairs are settled based on: (1) the decedent’s Estate Plan or, (2) when pre-death planning is absent or insufficient, the Arizona laws of intestacy.[1]
The work of Estate Administration is a function of the extent to which a decedent has engaged in pre-death planning and can be organized within the following broad categories: Testate Administration, Intestate Administration, Small Estate Administration, Revocable Trust Administration, or a combination of these.
Testate Adminstration
Testate Administration is administration of the estate of a person dying with a valid Will. Probate is the legal procedure by which the Will is proved to be valid or invalid in the Superior Court of Arizona.[2]
A Will is without effect until it is validated in the Superior Court. The person nominated as the personal representative in the Will has no power or authority to act until appointed by the Superior Court. The named personal representative begins the probate proceeding by filing a petition (accompanied by the original Will) in the Superior Court of the county in which the decedent resided. Upon appointment, the personal representative must collect assets, pay debts and expenses, prepare and file estate and income tax returns, file an inventory and appraisement with the court, account to the estate beneficiaries, distribute assets to the beneficiaries and close the estate.
Intestate Administration
Intestate Administration is administration of the estate of a person dying without a valid Will. An interested party[3] begins the proceeding by filing a petition with the Superior Court in the county in which the decedent resided. Upon determining that all interested parties and issues have been properly addressed by the petition, the court will issue Letters of Personal Representative to the person seeking appointment as personal representative. Once appointed, the personal representative must collect assets, pay debts and expenses, prepare and file estate and income tax returns, file an inventory and appraisement with the court, account to the estate beneficiaries, distribute assets to the beneficiaries and close the estate.
Small Estate Administration
Small Estate Administration is administration of the estate of a person dying with assets in his or her name alone, the total value of which is below Arizona’s statutory minimum for probate. Under Arizona law if the deceased person owned less than $100,000 of equity in real estate or less than $75,000 of personal property, then a traditional probate is not required. Instead, an Affidavit for Collection of Personal Property may be used to transfer assets to the heirs.
If the entire value of the deceased person’s equity interest in real estate is worth less than $100,000, then 6 months after the decedent’s death the heirs may file an Affidavit for Transfer of Title to Real Property with the Superior Court.
Revocable Trust Administration
Revocable Trust Administration is the administration of a Revocable Living Trust upon the death of the Trustor. The trust is administered by the person or entity named as the Successor Trustee in the trust agreement who has many of the same duties and responsibilities as a Personal Representative. The Successor Trustee must evaluate the assets of the trust, pay debts and expenses, prepare and file estate and income tax returns, account to the trust beneficiaries, and distribute assets to the beneficiaries.
Mixed Estate Administration
In some cases, it may be necessary to use a combination of procedures to completely administer a decedent’s estate. For example, a decedent dies with a Revocable Trust, valid Last Will and Testament, and $100,000 in a bank account in his or her name alone. Under this circumstance, it will be necessary to combine administration of the Revocable Trust with a Probate of the $100,000. If there were only $10,000 in the bank account (and no other assets held in the name of the decedent alone), the Estate Administration would be a combination of Revocable Trust Administration and Small Estates Administration.
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