February 27 2014 Blog Post Duties Personal Representative

So You’re Named as the Personal Representative . . .

Here’s the scenario . . . Your elderly aunt recently passed away and named you as the personal representative (i.e., Arizona’s word for executor) of the estate in her Will. You know that she has a modest home in the Phoenix area worth approximately $200,000, some bank accounts and CD’s worth approximately $100,000, and some other assets, all of which are in her name only. What do you do?

First Step – Get Appointed by the Court.

In general, if any person passes away in Arizona with assets in their name only valued at over $75,000, their estate will have to be administered through a probate case. There are exceptions to this rule for assets titled as joint tenants with right of survivorship, assets that are subject to a beneficiary or payable-on-death designation, and assets that are titled in the name of a trust. For purposes of this blog, I will assume that none of these exceptions apply. If you are the one named in your aunt’s Will, and your aunt owned these assets when she passed away, then you will need to be officially appointed by the court as the personal representative of her estate. Although sometimes it is necessary to have a hearing regarding your appointment, in most cases, you can be appointed by the probate clerk’s office if you file the appropriate application with the probate court along the original Will and various other documents. However, this is an important first step, as you will not be legally authorized to act on behalf of your aunt’s estate until you are appointed by the court and receive your “Letters of Personal Representative” from the court, which in essence give you the authority to administer her estate.

Once You Are Appointed, What Are You Supposed To Do?

As the personal representative, you are required to locate and collect all of the estate assets. Sometimes this is easy if the deceased person was organized and had a good filing system. However, sometimes it can be very difficult. You also need to deal with any creditors of the estate. Most creditors are determined by looking at the decedent’s bills that come in the mail. Any unknown creditors are handled by publication of a Notice to Creditors, which gives any such creditors four months from the date of the publication to file a claim. Next, as the personal representative, you are also required to deal with all estate beneficiaries in good faith and provide them with a full accounting of the assets and liabilities of the estate. Finally, after all administrative expenses of the estate and just debts are paid, the personal representative distributes the assets to the estate beneficiaries according to the terms of the Will. Generally speaking, as long as there are no issues that come up, this process will take approximately six months to a year. You might ask if the personal representative can be paid for their work on the estate, and the answer is yes. In general, though many family members choose not to take any compensation for their efforts, a personal representative is entitled to reasonable compensation. Most often, this is determined using an hourly rate based on the circumstances of a particular case. When counseling a personal representative, I always tell them to keep track of their time and the work they performed in order to document the basis for such compensation.

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