Introduction to What Happens During Probate (Part II)

In the initial stages of the probate process, the individual who is either appointed by the will or who believes he or she can administer the decedent’s estate will present him- or herself to the court along with a petition to probate the decedent’s estate and a copy of the will, if there is any. The court must make two initial determinations at this stage: (1) whether the will is valid and should be admitted to probate; and (2) whether the person who has presented him- or herself to the court should be named as the personal representative (or executor or administrator – all three terms are essentially synonymous with one another) of the estate. Once the court has made a determination regarding the will and has selected a personal representative, then the court will issue Letters of Administration to the representative that will enable him or her to begin taking possession of the decedent’s bank accounts and reviewing financial records.

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The representative must then begin notifying the decedent’s actual and potential creditors of his or her appointment as representative and of the time within which they can file a claim against the estate (if, for example, they believe the decedent owed them money). Notice of his or her appointment must also be given to the decedent’s heirs and any beneficiaries identified in the decedent’s will. Finally, the representative must complete an inventory to identify and place a value on all of the decedent’s property that he or she owned in whole or in part. This inventory must usually be completed within ninety days of being appointed.

Pay Taxes on the Estate

Once the inventory has been complete and submitted to the heirs, beneficiaries, and the court, then the representative may start actually “managing” the estate and its property. This begins by paying the tax debt that may be owed on the estate’s property. Federal estate taxes may be owed in addition to state property taxes and other taxes. The statutes that assess taxes on a decedent’s estate can be complicated, difficult to understand, and may periodically change. This is likely to be one of the representative’s most difficult tasks and require some measure of research and planning in order to properly complete. If the representative does not pay the appropriate taxes, then the heir or beneficiary who receives certain property may be left responsible for paying these taxes. A tax professional can be consulted if the representative feels uncertain about how to complete this step.

Manage the Estate’s Assets

probateAs long as the estate is open and being administered the representative must exercise reasonable care to ensure the estate’s assets are not destroyed and their value not unnecessarily diminished. The representative may use the estate’s assets to pay reasonable debts and obligations, including funeral expenses, as well as provide a stipend to him- or herself for the work he or she has done in managing the estate thus far. If a creditor has timely submitted a claim to the court, the representative must also timely pay these claims.

Distribute the Estate’s Property

The final step of the probate process is to distribute the assets of the estate (whatever assets remain). Any community property must be given to the decedent’s spouse, if he or she is still living (a separate accounting showing what property the representative determines to be community property is usually completed and submitted to the heirs, beneficiaries, and the court prior to distribution). If the decedent left a will and this will was admitted into probate, then the representative will distribute the remaining assets according to the will. If the decedent did not leave a will, then the remaining assets must be distributed in accordance with Arizona probate law.