(SEVEN MUST-DO STEPS)
Probating an estate or trust is like working on an engine. Each individual process is not complicated; however, the entire machine must work together for success. Here are seven must-do steps for a personal representative/trustee to successfully complete the process.
1. INVENTORY: Make a detailed list of the assets in the estate and/or trust. Remember, your family and friends, the other beneficiaries and heirs, will carefully scrutinize this list. Moreover, a court might also be scrutinizing this list. Take care that the list is accurate and complete.
2. APPRAISE: After you create the inventory of assets, you must appraise the assets. You likely will need to hire appraisal experts to appraise the assets. Practically speaking, appraising personal property with little value can be done in the same manner as appraising items given to Goodwill. However, things of greater value should be appraised by professionals. For real property an appraisal professional for real estate should be retained. For cars you may use Kelley Blue Book. If it is a collection, an expert in that collection should be retained.
3. DEBTS: Identify all the creditors to the estate and/or trust. Make a list of creditor names, addresses, account numbers, and how much is owed. Identify statements that prove what was owed. Keep all this information in a file by itself as you will need it for the accounting.
4. GET ADVICE: Advice from professionals is will help to successfully complete the process. I recommend working with an attorney who has a trusted network of advisers including a CPA, real estate sales professionals, appraisal professionals, and investment advisers. You must determine with your attorney how you will change the various titles to the assets, how you will handle taxes and debts, and the legal process by which you will administer the estate or trust. Sometimes, estates are so small that a shortened procedure for administration can be undertaken. Other times, estates and trusts are so large and complex that a lengthy court process is necessary to fully administer.
5. PREPARE AN ACCOUNTING: Preparing an accurate and complete accounting is an important step in administering the estate or trust. The beneficiaries and heirs want to see where the money has been spent. They want to make certain that you have accurately and completely done your job.
6. PROPOSED DISTRIBUTION: Along with the accounting you should send out a proposed distribution schedule. Under Arizona law, a person must object to a proposed distribution in 30 days; otherwise, the devisee/beneficiary will lose the right to contest the distribution. Again, you should work with your attorney to make a proposed distribution that will foreclose objections.
7. DISTRIBUTE AND PAY: The final steps are distributing the estate/trust to devisees/beneficiaries and pay the debts. In this process, I recommend obtaining receipts and releases wherein the devisees/beneficiaries release you of liability associated with the estate and trust.