Probate is the process of settling a decedent’s estate, fulfilling any final debts and distributing assets to heirs and beneficiaries. Probate court supervises this process, offering oversight to protect the rights of the deceased (known as the decedent) and prevent the mishandling of property. While probate court may seem tedious at times, its primary purpose is to prevent fraud after someone’s death.

In Arizona, probate court procedures are dictated by a set of laws called the Uniform Probate Code. The process begins when someone acting on behalf of the decedent files a petition with the court to initiate the probate proceedings in the county where the decedent lived or owned property. From there, regardless of the complexity or size of the estate, the process can be summarized in five steps.

 

1.      Authenticate the will and designate a personal representative

The judge will verify the death certificate, and, if the decedent left a will, the judge will confirm that it is the most recent version, properly signed by the decedent. The court will then certify who is to be the estate’s personal representative. This individual will serve as the estate’s legal agent, with full authority to act on behalf of the decedent’s probate assets. They will be issued a certified court document, sometimes referred to as the “letters of administration” or “letters testamentary”.

A proper will should nominate someone to be the personal representative, also referred to as the executor. When the decedent does not have a will, someone will need to ask the court to appoint them as the estate’s administrator. Usually, this is done by a spouse or adult child; however, if there is a dispute over who should serve as the administrator, the court has the power to appoint a neutral public administrator.

The court will normally require that the personal representative notify heirs and beneficiaries, and post a notice in the local newspaper to alert any other interested parties, including creditors, to the beginning of the probate proceedings.

 

2.      Collect the decedent’s assets

The court will instruct the personal representative to begin by taking inventory of the decedent’s assets. The goal is to account for the assets’ value at the time of the decedent’s passing, referred to as the “date of death value.” Liquid assets, such as bank or brokerage accounts, can be confirmed with the most recent account statement. Illiquid assets, such as real estate, jewelry, or cars, would require a professional appraisal. Depending on the situation, the court may appoint an appraiser, or the estate may be allowed to hire an independent appraiser.

 

3.      Assess the decedent’s liabilities

During this endeavor, the personal representative is required to compile the decedent’s outstanding liabilities. This includes utility bills, medical bills, funeral expenses, credit cards, personal loans, etc. It also includes any expenses incurred during the estate’s administration, such as legal and accounting fees.

Creditors with outstanding claims against the decedent must be notified of the death, and the court will dictate how much time creditors have to respond with any claims against the estate. The length of time creditors have to present a claim will vary depending on the size and complexity of the estate. When claims are received by the personal representative, he or she can accept or reject the claims. If rejected, the creditor has the right to petition the court for a judge to decide if the claim is valid.

Finally, the personal representative will need to file an income tax return for the year the decedent passed away. Depending on the value of the decedent’s assets, the estate may be liable for inheritance taxes (or death taxes), which may necessitate filing estate tax returns. If so, estate taxes are generally due within nine months of the decedent’s date of death.

 

4.      Settle the liabilities

Once the balance sheet with the estate’s assets and liabilities is compiled, the personal representative will pay for the decedent’s final obligations in the following order:

  1. Administration expenses
  2. Funeral expenses
  3. Debts
  4. Taxes
  5. All other claims

During this process, the personal representative may be permitted to sell estate assets to fulfill the decedent’s obligations. This is a crucial part of probate where the court can intervene to determine the validity of any disputed obligations, and to either require or prohibit the sale of estate assets to cover such claims.

 

5.      Distribute the balance of the estate

For many people this is the first thing on their mind when approaching probate court, but it’s the final step in the actual process. Once all the previous steps are completed, the personal representative can request the court’s permission to distribute the remaining balance to the decedent’s heirs and beneficiaries.

If the decedent left clear instructions in the will and none of the heirs or beneficiaries dispute it, this is a fairly simple process. However, if an interested party contests the distribution, this is another occasion where the court can provide crucial supervision and judgement.

 

What does the court do if the decedent didn’t leave a will?

Probate court is required regardless of whether the decedent leaves a will or not. Cases without a will, where the will is rejected by the court for being invalid, or where someone successfully contests the will, are all referred to as “intestate estates”. The court will appoint a personal representative, either next-of-kin or a neutral public administrator. That individual will carry out the full probate process, only instead of distributing assets according to a will, the assets will be subject to the state’s intestate succession laws. Normally the estate is divided amongst heirs-at-law, kin who are closely related and therefore entitled to inherit the estate.

 

How does the court intervene if there are disputes?

Probate proceedings involving disputes are referred to as “formal probate”, and can be characterized as either “supervised” or “unsupervised”. Supervised formal probate requires the greatest amount of involvement from a judge, mandating the court be part of every decision in the probate process. In unsupervised formal probate, the judge is only required to sign off on certain actions, such as selling assets, paying creditors, and distributing the final balance to heirs and beneficiaries.

In the ideal case, there is a clear and valid will, all parties are in agreement, and the number of creditors with claims against the estate are limited. These cases are referred to as informal probate, and can save a significant amount of time and money, as the personal representative is allowed to carry out the probate process largely unencumbered.

 

Do You Need Help with Probate Matters?

As you can see, AZ probate laws can be complex. It requires a number of steps and without the right approach, it’s easy to get lost in the details. At JacksonWhite, we can make probate a clear, easy-to-understand process. If you’d like help with probate matters, call the talented team at JacksonWhite Law today.

We can help explain your legal options and direct you to the probate solution that works for you and your loved ones.