Opening a Probate
When a loved one dies, and there is no trust in place, very often the family has to open a probate in the county in which the decedent lived. The reason that the probate needs to be opened is because the decedent owned property and the property needs to be transferred to the beneficiaries.
If the property is in a Trust, the trustee can transfer property with the permission of a court. If there is no trust, or if the property is left out, we have to open a probate. The name of the job of the person who administers a probate estate is generally called an executor of an estate.
Probates and Wills
Sometimes a decedent has written a Last Will and Testament before death. The Last Will and Testament is a key to the probate court. The reason it is a key is that the Will document itself, is not enough to get control of any assets. In order to have control over property, the will must be admitted into probate and an executor (executrix) has to be appointed by the court. Many states use the gender-neutral term for this job, personal representative. The court will issue Letters of Personal Representative which gives the executor permission to act. Without these letters, the executor can do nothing.
What if there is no Last Will and Testament?
If there is no Last Will and Testament, either because it got lost or destroyed, or because the decedent never wrote one, the family goes into court ‘Intestate’, which means, without a will. The court will then appoint the executor based on family relationships and who actually wants this job.
But what if nobody wants the job?
Dealing with the death of a loved one is always difficult. Sometimes the family is grieving, and no one can emotionally handle being in control of the probate. Sometimes all the beneficiaries are too young to do the job. Sometimes there are more bills than assets. In that case, it may not be cost effective to even open the probate.
But other times, there are many assets including cash and real estate. The job of executor is very complicated and time consuming. There are also bills to pay to the lawyer to open up the probate. There are funeral bills and burial costs. Sometimes there are medical bills and taxes to pay. There will be money there to inherit, but the family cannot do this job.
Licensed Fiduciary
We see many situations where the family lives out of state, and no one can come down to do the job as executor. During the COVID 19 pandemic especially, many people refused to leave their homes or come to Arizona. Fortunately, the family has many good choices, even if they are unable to be here personally. The family can hire the services of a licensed fiduciary.
A licensed fiduciary is trained to act when the family is unable to do so. They are very familiar with the probate process. They understand which income tax returns might have to be filed. They are also very familiar with investments. The licensed fiduciary can take over when the family is unable to act. The fees to hire a licensed fiduciary are usually available on their websites.
Corporate Executors
If the estate is very large, we sometimes see families hiring a corporate trustee, like a bank or a trust company to do the job of executor. Corporate Executors are also trained to act when the family is unable or unwilling to do so. Corporate Executors are familiar with investments. They are also familiar with which income tax, and sometimes estate and gift tax returns, have to be filed and when.
How long will the probate take?
Whether the family or loved one’s act as executor, or a licensed fiduciary or bank or trust company serves in that job, the average time a probate is open in Arizona is two years. Yes. Two years. Probate is not a simple process. It is complicated. There are many rules and regulations which have to be complied with. There are assets to collect. There are bills to pay. There are tax returns to file. This job is not for someone who does not like this type of work.
It’s better if you decide
It is always better for you to decide who will do the job of executor. You know best between your loved ones and friends. Just remember, if the person you pick backs out at the end, you need to have others in the queue. If everyone bails, just know there are several good options. Check online for the fee schedules of banks, trust companies and licensed fiduciaries.
Remember it costs money to do these jobs. The estate needs to pay for these services. Even if your spouse, child or loved one is chosen as executor, they should be paid too. It’s the right thing to do. Don’t leave your family with additional problems. Death is difficult enough.
Are you leaving your family difficulties?