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Personal Representative (or Executor) Handbook - Arizona
Ronald P. Adams and Ryan M. Scharber
The purpose of this handbook is to assist you in carrying out your duties as the Personal Representative (or Executor) of
the estate of an Arizona decedent.
This handbook is updated from time to time (most recently
on August 29, 2018; please contact us if you are not sure you have the latest version. Also, please remember that this handbook is a guide; it is not intended to answer every question that could come up in the administration of a trust, and it is not intended to give you legal advice.
Successor Trustee Handbook
While our Personal Representative Handbook addresses many of the issues commonly
encountered by a fiduciary of a probated Arizona estate, it should not be relied
on as a comprehensive resource.
If, after reviewing this information, you have a question that can be answered
in a brief conversation, please call Ron Adams or Ryan Scharber at
What Is a Personal Representative?
In Arizona, a personal representative (known in
many states as an executor) is the person or entity appointed by the
Court to administer the estate and assets of someone who has died (a
decedent). In other words, the personal representative has the
responsibility to ensure that the decedent’s affairs are taken care of
after death, in accordance with the decedent’s Last Will and Testament
(Will), if one exists, or in accordance with state law if the decedent
died without a Will.
The personal representative’s essential
duties are to:
collect the assets of the decedent,
pay any outstanding bills or creditors that
need to be paid, and
distribute the decedent’s assets to
whomever is supposed to receive them under the Will (or, if no Will
exists, under state law).
While that may not sound overly complicated,
there are many issues a personal representative must address once he or
she is appointed by the Court.
Acting as a personal representative can be
simple or complicated, depending largely on whether the Decedent’s
assets are fairly straightforward and simple, or the decedent owned
complex assets at death, such as business interests or real estate in
Who Will Serve?
Who has the right to serve as
personal representative will depend on whether the decedent left a Will.
If the decedent died with a valid Will in place at the time of passing,
the decedent is said to have died testate. In that case, whoever the
decedent nominated to act as personal representative in the Will has the
right to serve.
Bear in mind, though, that just because you may
have been nominated to serve as personal representative in someone’s
Will does not mean you have a duty to accept that nomination. You can
always decline, in which case any alternate candidate nominated in the
Decedent’s Will would then have the opportunity to serve as personal
Conversely, if the Decedent died without a valid
Will, the Decedent is said to have died intestate. In that case, state
law (in Arizona, A.R.S. § 14-3203) controls who has the right to serve
as personal representative. Roughly summarized, the people having the
right to serve as personal representative under most intestate statutes
are, first, the surviving spouse of the Decedent and, second, other
persons who will inherit property of the Decedent under the intestate
Necessity of Probate
One of the first matters
you must determine is whether a probate is needed.
If the value of all personal property held by
the decedent at death, including cash in the bank and other accounts,
vehicles, jewelry, etc., is valued at less than $75,000, and the net
equity in real property owned by the decedent is valued at less than
then court involvement can be avoided entirely, and the estate can be
administered quickly and inexpensively through a simple affidavit
If, however, the value of the estate exceeds the
above figures, then a probate will be necessary in order to administer
the decedent’s affairs.
First Things First
As mentioned earlier, after the priority of
appointment has been established, you need to decide whether you want to
accept the role. Being nominated as personal representative in a Will is
an honor; the nomination implies that the decedent held you in high
At the same time, acting as personal
representative involves considerable responsibility; if you make a
mistake in handling the decedent’s affairs, you can be held personally
liable by the decedent’s heirs
and creditors for any damages that your mistake causes. While most
estates are not difficult to administer, if the assets owned by the
decedent at death are especially complex, or the heirs or other parties
involved do not get along well, acting as personal representative can be
an onerous and thankless job. Before agreeing to serve, you should
carefully consider the circumstances and whether you are up to the task.
You should also bear in mind that it is a rare
estate that requires immediate action. While sometimes loved ones feel
compelled to begin the probate process immediately, in most cases there
is no need to rush. Family members should generally take whatever time
they need to grieve the decedent’s passing before turning to legal
matters. After all, you have no duties to anyone (nor power to do
anything with the decedent’s assets) until you are officially appointed
to the position by the Court.
Opening the Probate
If you decide to serve as personal
representative, you need to be officially appointed to the position by
the Court of the county in which the decedent resided at the time of
death. That is accomplished by filing with the local Probate Court a
pleading called an Application for Informal Probate of Will and
Appointment of Personal Representative. Alternatively, in the case of an
intestate decedent, the pleading is called an Application for Informal
Appointment of Personal Representative. Both pleadings initiate what is
called an “informal probate.”
If certain heirs or creditors of the estate may
become adversarial during the process, or there is a question as to
whether a certain document is in fact the “last” Will of the decedent,
you may instead apply for a “formal probate.” This will also be true if
the original of the decedent’s Will cannot be located and you need to
probate a copy of a Will.
The differences between an informal probate and
a formal probate are fairly significant.
For example, an informal probate rarely requires
a hearing prior to the appointment of the personal representative. In
most informal probates, the Probate Registrar issues a Letter of
Personal Representative immediately upon filing the appropriate
paperwork and the original Will.
In a formal probate, a hearing will first have
to be held with the Court to verify that the Will left by the decedent
was in fact the decedent’s Last Will and Testament or to verify that the
decedent died without a valid Will in place.
Within 30 days after your appointment, you must
(a) notify all heirs and devisees
of the decedent’s estate that a probate has been opened and (b) provide
such heirs and devisees with a copy of the Will in a “testate” probate.
In an “intestate” proceeding there is no Will to provide a copy.
In a formal probate, the notice of appointment
need not be given to anyone who was given notice of the initial
application for formal probate, and who as a result has already been
given an opportunity to object. In all other cases, the notice must also
notify those heirs and devisees that they have a limited period of time
to object to the appointment of the personal representative or to the
admission of a particular Will as the decedent’s valid Last Will and
Initially, you (as the personal representative)
must identify and collect the assets of the decedent’s estate and
protect those assets from harm. For example, you may need to secure the
decedent’s primary residence to protect it against vandalism or to
prevent family members from removing items from the home.
Identifying the decedent’s assets may not be an
easy task, particularly if the decedent did not retain good records. You
may also have to spend considerable time poring over the decedent’s bank
and other account statements to determine where the decedent’s monies
were kept. You will also need to inspect the contents of safe deposit
boxes and locate life insurance policies and retirement plans. In many
instances, copies of the decedent’s income tax returns can be a good
source of information to identify assets and accounts that the decedent
You must be able to account for all of the
decedent’s assets as they existed on the date of the decedent’s death.
You must then be able to determine what the value of the decedent’s
estate was as of that date. For bank and investment accounts,
determining value is easy. However, for many other kinds of assets,
professional appraisals might need to be obtained. This course of action
is essential not only when you cannot determine how much a particular
asset is worth; it may be required if an estate tax return must be
filed. For example, if the decedent’s estate has a value greater than
that which can pass free of estate taxes ($11.2 million for an individual in 2018), an
estate tax return must be filed, accompanied by professional appraisals
In addition, regardless of whether an estate tax
return is required, you must prepare and submit to heirs, within 90 days
after your appointment, an inventory and appraisement of estate assets.
The inventory and appraisement must identify each asset owned by the
decedent and provide the fair market value of each asset as of the date
of the decedent’s death. In some cases, it will be impossible for you to
ascertain that fair market value without a professional appraisal. Real
estate is one good example of when a professional appraisal may be
needed, but other types of assets (e.g., art, jewelry, antiques, and
stock in a closely held company) may be particularly hard to value
without a professional appraisal or valuation.
After the inventory and appraisement are
complete, you must mail copies to all parties interested in the estate,
including heirs and others named in the Will, as well as any creditors
who have filed claims against the estate (see “Notify Creditors” below).
You must then file a pleading with the Court affirming that this
requirement has been met.
Alternatively, you can file the inventory and
appraisement itself with the Court and then mail a notice to all
interested parties that you have done so.
The former option is almost always used because
it preserves confidentiality, whereas the latter option makes the
inventory and appraisement part of the public record.
Because not all of the decedent’s assets will
need to go through the probate process, it will be important for you to
distinguish between probate and non-probate assets. Only those assets
that at death were titled in the decedent’s name alone, without a
beneficiary designation, will need to go through probate. Most notably,
this excludes from probate any assets:
owned jointly by the decedent and another
any assets held in a trust or held by an
in which the decedent had an ownership interest; or
any asset that had a beneficiary
The first two types of assets are controlled by
the terms of the joint ownership, trust or entity to which they belong.
The third type of assets, which can include life insurance policy
benefits, IRAs and retirement plans; “pay on death” (POD) or “transfer
on death” (TOD) bank and brokerage accounts; and even real estate for
which a beneficiary deed has been recorded, are considered “non-probate
transfers” and never enter into the probate process.
As mentioned above, after the extent and value
of the decedent’s assets at death are determined, you must secure
valuable personal property, such as jewelry, artwork, guns, etc. If the
decedent had a safe deposit box and you have access to it, you should
inventory its contents and keep them in your custody. Especially
important are any documents that may be helpful in administering the
estate (e.g., the decedent’s original Will or other estate planning
Access can be tricky, as Arizona banks, after
they are notified that the owner of a safety deposit box has passed
away, are required to make an inventory of the box’s contents, seal it,
and send the inventory to the Arizona Department of Revenue for tax
Be aware, though, that you have no duty to
inform the decedent’s banks regarding the decedent’s death - at least
not right away.
The preliminary information-gathering phase is
also a good time to collect important documents, such as bank
statements, tax records, deeds to real property, titles to vehicles,
Be certain to order, through the decedent’s
funeral home, plenty of certified copies of the death certificate, as
many institutions will require the submission of a separate certified
copy to verify the death.
Also, you will need to apply to the Internal
Revenue Service for a taxpayer identification number (EIN) for the
estate (this is a fairly simple step that can be completed online at
www.irs.gov). As you gather the assets of the estate, and after you
receive the EIN, you will then open an estate bank account into which
you will deposit all cash proceeds.
In addition to notifying the decedent’s heirs
and devisees that a probate estate has been opened, you must also notify
all known and potential creditors of the estate that (a) the decedent
has passed away, (b) a probate has been opened to settle debts of the
decedent, and (c) you have been officially appointed to handle the
This notification is accomplished in two ways:
written notice with the above information
must be mailed to every known creditor of the decedent; and
a similar notice must be published in a
newspaper of general circulation in the county in which the decedent
lived, to give notice to any potential or unknown creditors.
To submit claims against the estate, known
creditors have the longer of (a) 60 days from receipt of the written
notice or (b) four months after first publication. Potential and unknown
creditors have four months from the date of first publication to submit
their claims to the personal representative. After expiration of these
time limits, any claims not timely submitted to the personal
representative are thereafter barred and can be safely ignored.
It is crucial that these notices be mailed and
published as soon as possible after your appointment, so that the time
period to submit claims against the estate can begin to run. Only after
the period to submit claims has expired can you be certain of the full
extent of the claims that may be made against the estate. If you
distribute assets to heirs or devisees of the estate before all creditor
claims have been paid, you will have a difficult time recovering those
assets to pay creditors who later, but still timely, assert claims. In
such a case, you will have personal liability to those unpaid creditors.
Using an Attorney
The process of notifying and dealing with
creditors is one example of why relatively few probates can be
successfully administered without some involvement from an experienced
probate attorney. Even the simplest of estates can result in personal
liability for the personal representative if the wrong creditor gets
paid or a legitimate creditor gets paid too soon or too much. For
instance, though the process outlined thus far may seem relatively
simple, a layperson is unlikely to know that some life insurance
proceeds and retirement assets are generally not subject to creditor
claims but that other non-probate transfers are, and may need to be
recovered by the estate in order to satisfy creditor claims. A false
move here can subject you to significant personal liability.
Also, bear in mind that there is no requirement
to consult with the attorney or law firm that prepared decedent’s estate
plan. Many lawyers can produce a simple Will, but only an experienced
probate attorney can adequately advise you on the potential pitfalls of
Never shrink from asking for legal or other
advice. That advice may cost something in the short run, but the cost
can be far less than it takes to fix a mistake later on. Remember, too,
that the estate will pay the reasonable costs associated with your
obtaining advice; conversely, you could end up paying out of your own
pocket for your failure to secure advice when you needed it.
Paying Valid Creditors
If you receive creditor claims against the
estate, one of your most important duties is to decide which, if any, of
the claims are valid. You have 60 days from the receipt of a creditor
claim to reject the claim as invalid; if you do not reject a claim
within 60 days of receiving it, the claim is deemed to be valid. If a
creditor’s claim is rejected, that creditor then has 60 days from the
date of rejection to file an adversarial proceeding with the probate
court to prove that their claim is valid.
If the estate’s assets are sufficient to satisfy
all creditor claims in full, then all creditors get paid the full amount
owed. If the assets of the estate are insufficient to pay all creditor
claims in full, then each creditor gets paid according to the priority
of claims described by state law, which in Arizona consists of:
first, costs and expenses of administration
(including the personal representative’s fees and legal expenses);
second, reasonable funeral expenses;
third, debts and taxes with preference under
fourth, reasonable and necessary medical and
hospital expenses of the last illness of the decedent, including
compensation of persons attending him or her;
fifth, debts and taxes with preference under
Arizona law; and
finally, all other claims.
Each of the estate’s creditors is assigned to
one of these categories and paid in the order listed above. As long as
there are enough assets to satisfy all of the claims in a given tier,
then the creditors within that tier are to be paid in full.
As soon as you reach a tier for which there are
not sufficient assets to pay all creditors in full, then each creditor
in that tier receives a pro-rated amount of their total claim based on
whatever is left, and any creditors in lower tiers receive nothing. For
example, if the estate assets are sufficient to pay in full only the
costs and expenses of administration and reasonable funeral expenses,
then no other creditors of the estate will receive payment.
Bear in mind, though, that the categories listed
above are for “unsecured” claims. If a creditor such as a mortgage
lender has a claim “secured” by the decedent’s primary residence, then
that creditor can foreclose on the residence if there is not enough in
estate assets to pay that creditor in full.
Because “costs and expenses of administration”
have priority over all other claims, legal fees and the personal
representative’s fee (if you choose to take one) can almost always be
paid immediately out of the estate, ahead of any other creditor.
Also note that taxes have always received
relatively high priority and that the IRS can pursue you personally if
you fail to pay them. Consequently, you will need to file at least one,
and maybe as many as three, of the following tax forms:
Form 1040, Personal Income Tax Return, is
for income earned by the decedent between January 1 and the date of
Form 1041, Fiduciary Income Tax Return,
must be filed if the estate’s gross income from the date of the
decedent’s death through final distribution of estate assets exceeds
$600. For example, if the estate holds investment accounts that generate
even modest revenue, this form will likely be required. However, many
simple estates will not hold such assets, gross income will not exceed
$600, and no Fiduciary Income Tax Return will be required. If required,
the Form 1041 will be filed using the estate’s EIN, which you obtained
to open up the estate’s bank account.
Form 706, Estate Tax Return, must be filed
if the estate’s gross value, plus any significant transfers made during
the decedent’s life, exceeds $11.2 million dollars (in 2018).
Administering Estate Assets
As personal representative, you are duty-bound
to deal with estate property as a “prudent person” would deal with the
property of another. Note that this is a standard of conduct rather than
of performance. Your actions (or times of inaction) will be judged
against what a reasonable person would have done in the same
circumstances, given the same limitations to which you were subject and
armed with the same information that was at your disposal.
If you conduct yourself properly, you will not
be faulted if something bad happens, such as a decline in the value of
estate assets. Acting reasonably under the circumstances is your basic
job description; if you do that, you generally need not worry about
being judged in the light of hindsight.
Note that, if you have or claim to have special
expertise in connection with any facet of estate administration, you
will be duty-bound to exercise that expertise. Thus, the standard for
judging your job performance will take into account your special
abilities (whether actual or claimed).
As personal representative, you are serving for
the benefit of someone other than yourself, and you must always act to
further the interests of the estate’s beneficiaries. You should not
enter a transaction that gives you an opportunity to benefit yourself at
all, much less at the expense of the estate. If any situation should
arise in which there is a conflict between your personal interests and
the interests of the estate, you must put the interests of the estate
For example, you should not sell estate property
to yourself, because this creates the appearance that you may have taken
advantage of the estate. In fact, such a transaction will be voidable by
the heirs to the estate, unless they have previously consented to the
transaction or prior court approval for the transaction was obtained.
Similarly, you should never loan estate funds to
yourself or to family members. The rules set forth in this paragraph are
strictly applied not only to transactions in which you deal directly
with yourself, but also to transactions in which you deal with entities
(such as partnerships or corporations) in which you are personally
interested. These rules apply even though a particular transaction may
be scrupulously fair, and even if it is advantageous to the estate.
Signing Contracts and Other Documents
Your duties in administering the estate’s assets will
likely include executing contracts and other documents on behalf of the estate.
When acting in your official capacity as personal
representative, you are generally shielded from personal liability for the
estate’s obligations, provided you observe certain important
requirements, such as disclosing that, in signing a document on behalf of the
the estate is the party to the
contract, not you individually (e.g., the contract names “the Estate of John
Doe” as a party to the agreement), and
it is clear that you are signing on behalf of the
estate, not in your individual capacity (e.g., “Your Signature,
Failure to do either can deprive you of the
liability protection to which you are entitled and can result in your being held
personally liable for claims made by the other party to the agreement.
Distributing Remaining Assets
After you pay all valid claims against the
estate, you will then distribute the remaining assets according to the
decedent’s Will or, if the decedent died intestate, according to state
Before final distribution is made, you will need
to account to the heirs and/or devisees for your administration of the
estate. This accounting report must start with the initial inventory and
appraisement of estate assets and then detail every bit of income to the
estate, and every expense paid out of the estate, during your
The heirs and devisees then have an opportunity
to question or object to the accounting. As a result, it is critical
that you keep very detailed records of all transactions occurring during
your administration. If you intend to charge a fee for acting as
personal representative, you must keep a detailed journal or log setting
forth all of your time spent in administrative duties on behalf of the
Closing the Probate
After all of the estate’s assets have been
distributed to the heirs or devisees, your final task is to file a
Closing Statement with the Court. The Closing Statement affirms that you
have complied with all of your duties and that the estate’s
administration is complete.
In an informal probate, the probate will remain
open and inactive for one year from the filing date of the Closing
Statement. If no interested party decides to assert their rights to
estate assets during that one-year period, you will be officially
released from your duties by the Probate Registrar, and the probate
matter will be officially closed.
In a formal probate, you must file a Petition
with the Court for an order of complete settlement. If the Court
determines that the estate has been fully administered and that proper
accountings have been made of your administration, the Court will issue
an order of settlement and discharge you from further responsibility.
Please keep in mind that the contents of this
handbook are far from exhaustive. Rather, they are intended to alert you
to your duties and to impress upon you the significance of your
To repeat an earlier suggestion, don’t be overly
cautious in seeking legal or other professional advice. That advice may
cost something in the short run, but the cost can be far less than it
takes to fix a mistake later on. The estate will pay the reasonable
costs associated with your obtaining advice; conversely, you could end
up paying out of your own pocket for your failure to secure advice when
you needed it.