Disclaimer: This article is for educational purposes and does not constitute legal advice.
Detailed Answer
In Arizona, a personal representative (PR) holds a fiduciary duty to manage and safeguard estate assets. To fulfill this duty, the PR should open a dedicated estate account to prevent commingling personal and estate funds.
Fiduciary Authority. Under A.R.S. §14-7102(A)(10), a PR may receive estate property, collect income, and “open and maintain bank accounts.” Establishing a separate account helps track receipts, disbursements, and maintain accurate records for court reporting.
Duty to Avoid Commingling. Arizona law and fiduciary principles require estate funds remain distinct from a PR’s personal assets. Commingling can breach the PR’s duty of loyalty and impartiality and expose the PR to personal liability or court sanctions.
Tax Identification. Before opening an account, the PR should obtain an Employer Identification Number (EIN) from the IRS. Using the decedent’s Social Security number may create tax confusion and increase identity‐theft risk.
Bank Requirements. Most banks ask for a certified copy of the Letters Testamentary or Letters of Administration. Compare bank fees, interest rates, and services. Choose an institution experienced with fiduciary accounts.
Helpful Hints
- Use a clear account title, e.g., “Estate of Jane Doe, by John Smith, Personal Representative.”
- Obtain an EIN (IRS Form SS-4) before opening the account.
- Keep detailed records of all deposits, withdrawals, and transfers.
- Restrict access to authorized signers and consider dual signatures for large transactions.
- Reconcile the estate account monthly to catch errors early.
- Retain bank statements and cancelled checks for the estate file.
- Prepare periodic accountings for beneficiaries and the court as required by A.R.S. §14-7106.