Personal representatives have a fiduciary duty to act in the best interest of the estate they are appointed to administer.  This fiduciary duty prohibits personal representatives from acting to advance their own interests.  However, many times those appointed as personal representatives are also situated to inherit a portion of the decedent’s estate.  Because these situations are inherently susceptible to conflicts of interest, Arizona has passed specific legislation with instructions on how to approach them.

Conflicts of interest include any sale or encumbrance to the personal representative, his spouse, agent or attorney, or any corporation or trust in which he has a substantial beneficial interest, or any transaction which is affected by a substantial conflict of interest on the part of the personal representative.  A.R.S. §14-3713.

Where a personal representative enters into a transaction that creates a conflict of interest, any person with an interest in the estate can petition to have the transaction voided.  There are some exceptions to this general rule, however.  Transactions cannot be voided for conflict of interest where:

• The person seeking to have the transaction voided consented to the transaction after fair disclosure.
• The Will expressly authorizes the transaction.
• A contract entered into by the decedent authorizes the transaction.
• The personal representative gave notice to interested persons and received approval by the court.

Personal representatives, then, are generally prohibited from acting in their own interest when administering a probate estate.  However, they are permitted to act in accordance with the Will, even if it promotes their self-interest.  Where the Will does not give express permission, personal representatives may still be able to enter into certain transactions by obtaining the approval of the court and providing adequate notice to interested parties. 

None of this should be handled without the assistance of legal counsel.  When entering into transactions that create the appearance of a conflict of interest, personal representatives should seek legal assurance that their efforts will be upheld.  An Arizona probate attorney is best qualified to assist in this manner.  For a consultation with a probate  attorney at JacksonWhite, please call (480) 464-1111 and ask speak to someone in the Elder Law department.