Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
Step 1: Inventory All Estate Assets
Under Arizona Revised Statutes (ARS) §14-3101, the personal representative must file an inventory and appraisement of all estate assets within 60 days of appointment. This includes real property, bank accounts, investments, personal property, and intangible assets. ARS §14-3101.
Example: Jane, appointed as the personal representative for her father’s estate, lists his home, car, three bank accounts, stock portfolio, and personal belongings.
Step 2: Identify Valid Debts and Expenses
The estate must pay valid debts and administrative costs. Common claims include funeral expenses, creditor claims, taxes, and fees owed to the court or personal representative. All claims must meet requirements in ARS §14-3804.
Step 3: Pay Claims in Priority Order
Arizona law sets a strict priority for payments to protect certain claims first. Under ARS §14-3804, the order of payment is:
- Costs and expenses of administration
- Funeral expenses
- Family allowance
- Debts and taxes with priority liens
- General unsecured debts
Example: If the estate owes $20,000 in funeral costs and $50,000 in unsecured creditor claims, the funeral costs must be paid first, then the unsecured debts.
Step 4: Calculate the Net Estate
Subtract total debts and approved expenses from the gross value of estate assets. The result is the net estate available for distribution.
Calculation Example: Gross estate value $500,000 minus $70,000 in debts and expenses equals a net estate of $430,000.
Step 5: Distribute Remaining Assets
After debts, fees, and expenses are paid, distribute the remaining assets according to the decedent’s will or Arizona’s intestacy statutes (ARS §14-2102).
Helpful Hints
- Keep detailed records of every asset and claim.
- Review creditor claim deadlines to avoid missing valid claims.
- Consult a probate attorney if you face complex assets or disputes.
- Understand your duties as a personal representative to avoid liability.
- Use professional appraisers for high-value or hard-to-value assets.