An executor (also referred to as a personal representative) is the person that is responsible for managing the affairs of a deceased person’s probate estate. In a will, you choose the person that you want to act as your executor. This role comes with significant responsibility, so it is critical to choose someone trustworthy and able. The law requires that your executor act with the highest degree of honesty, impartiality, and diligence. Your executor can work together with a Phoenix probate attorney like Nicole Pavlik to fulfill their duties.
Below is a list of what you can expect from the executor of your estate in Phoenix.
1. File Your Will to the Probate Court. Your executor must submit your will and an application to serve as the personal representative of your estate to the Superior Court of Maricopa County. When the court accepts your will and approves the application, the probate process officially begins. Your executor will receive Letters of Appointment and have the legal authority to act on behalf of the estate.
2. Notify Beneficiaries and Creditors of the Death. The executor must send out a formal notice to all interested parties. An interested party is any person or entity with a financial interest in your estate, including beneficiaries listed in the will, heirs, and creditors. Additionally, the executor should publish a notice in a local Maricopa County newspaper to alert any unknown creditors or interested parties.
3. Gather and Inventory Your Property. Your executor must identify, locate, and inventory the property in your estate. Some of the assets may be mentioned in your will, but the executor should not assume it lists all your property. They must track down all estate property that exists, including financial accounts, insurance policies, safe deposits boxes, business interests, etc. After gathering the property, your executor must determine the value of the assets, including real estate, artwork, and antiques.
4. Manage Estate Property. Probate can take months to years to complete. Your executor will care for the estate’s assets until they are distributed, and probate is closed. This responsibility includes ensuring that insurance policies don’t lapse and keeping mortgages and car loans current. The executor will use the estate’s money for this purpose. They do not need to pay out of pocket.
The executor must prudently manage and invest estate funds. If probate is supervised, the executor must submit an accounting of the deceased’s assets to the probate court detailing the actions and transactions they made on behalf of the estate. In an informal probate, the executor only needs to provide interested parties with a copy of the accounting. If your executor mismanages estate property, they can be held personally liable.
5. Settle Taxes. There are various tax returns that your executor is responsible for filing. If the value of the estate is above the exemption ($11.8 million in 2021), your executor must prepare and file a federal estate tax return. There is no state estate or inheritance tax in Arizona. If any of the estate’s assets earned income during the probate period, the executor must file an estate income tax return. Finally, your executor must prepare and file a personal income tax return for the decedent’s final year of life.
6. Pay Debts. Before the executor can disburse your property to the beneficiaries, they must pay the estate’s creditors. In some cases, property such as real estate will need to be liquidated. In Phoenix, creditors must be paid in the following order:
• Costs and expenses of administration
• Funeral expenses
• Federal taxes and debts,
• Medical and hospital expenses relating to the last illness or injury of the decedent
• Arizona Department of Revenue taxes, and
• All other claims
7. Distribute Your Property to Beneficiaries. You can expect your executor to distribute the remaining estate property to your beneficiaries according to the instructions in your will. If there is no will, the personal representative will distribute the property according to Arizona’s intestate laws.
8. Close the Estate. The final act of your executor is closing the estate. The executor closes the estate by filing a petition for closing with the court.
Your Phoenix Estate Planning Attorney
If you are interested in creating or updating your estate plan, you should consult with an experienced estate planning attorney who understands Arizona’s unique laws and regulations. Nicole Pavlik has successfully helped many Phoenix residents navigate the estate planning process and is ready to offer you the advice you need. Call Nicole Pavlik Law Firm today at 602-635-6176 to schedule a consultation.