Friday, January 23, 2015



A self-represented successor trustee or personal representative (the “Estate Manager”) often ignores warning signs that problems are ahead.  There are a number of signs a Estate Manager is will experience problems and possibly litigation.  Here are five signs the Estate Manager is in trouble and an attorney should be hired:

1.   THE ESTATE MANAGER THINKS THE TRUST AND/OR WILL ARE A SECRET.  The Trust and Will are not a secret held only by the Estate Manager.   Beneficiaries requesting a copy of the Trust or Will, unless the document says otherwise, should receive the ENTIRE document.  If the Estate Manager makes the decision to withhold the document, it makes the Estate Manager appear furtive and beneficiaries lose trust.  When that happens, litigation may be forthcoming.     

2.  THE ESTATE MANAGER IS ACCUSED OF WRONGDOING. A sign of possible litigation ahead is a beneficiary accusing an Estate Manager of wrong doing. This can happen even when the Estate Manager has committed no technical wrong (e.g. he has not stolen the money).  At key moments in the administration of a probate or trust certain things must happen.  An Estate Manager who meets deadlines, provides notice of key events, and provides proper accounting of the estate/trust, engenders trust, can quiet distractors, and in many cases, can stop litigation before it happens.   

3.  THE ESTATE MANAGER THINKS TAXES ARE A PROBLEM ONLY FOR THOSE “RICH GUYS.”  Every estate and trust, large or small, must consider tax issues.  For estates and trusts over 5 million dollars, estate taxes (aka “death taxes”) may be owed.  However, there are other taxable events.  For example, negotiating debts lower than the face amount owed may cause a taxable event.  Significant gifting before the death may cause a taxable event or, at minimum, reporting of the gifts.  The estate/trust making money after the death may cause a taxable event. The decedent’s last income tax return may need to be filed.  As the saying goes, the only thing certain is “death and taxes.”       

4. THE ESTATE MANAGER PAYS BENEFICIARIES BEFORE PAYING ALL THE DEBTS. Debts are paid before beneficiaries.  This sounds simple, but frequently it happens in reverse. An Estate Manager must keep enough money to pay debts and taxes or a lawsuit against the Estate Manager may be forthcoming. 

5.  THE ESTATE MANAGER GUESSES AT THE MEANING OF THE ESTATE DOCUMENTS.  Frequently, an Estate Manager does not understand the estate documents so he/she guesses at the meaning.  If the documents are unclear, an Estate Manager cannot guess at the meaning.  He/She must ask the court for instructions. 

These are just 5 warnings signs that the probate or trust administration is heading for trouble.  If you see any of these signs, either as a beneficiary or Estate Manager, you should immediately contact an attorney.  

Monday, May 19, 2014


Stephen was brilliant.  He graduated top of his class—he married the prettiest girl in town—his children were all above average—and his business ventures always succeeded.  While Stephen truly lived well, he died leaving a complicated estate. 

When Stephen died, his children gathered for his funeral.  Afterwards, they entered his study, where Stephen kept his important papers, and searched for his will.  His will was not found.  Instead, they found a photocopy of a will that was executed ten years previous.  The will gave everything to a charity. 

His children were aghast.  Did he really forget them and refuse to leave them a legacy?  After all, he had spoken to each child about the money he was leaving for education of his grandchildren.    

            Luckily for the children, they consulted a trusted attorney.  The children were informed that courts are reluctant to probate a copy of a will.  Where only a copy of a will is found, the will is presumed to be revoked unless proven otherwise.  The reason for this rule is simple: people frequently change their mind about how to divide their estates on death.  Therefore, they will often revoke the will by tearing it up.

According to A.R.S. § 14-2507, a person may revoke a will, in whole or in part, by performing “a revocatory act.”  This means, among other things, that the person who creates the will can revoke the will by “burning, tearing, cancelling, obliterating or destroying the will or any part of it.”  In Stephen’s case, the children will rest easy because the original will was never found.  If the charity tries to probate the copy of the will, it will need to prove that Stephen did not revoke the old will, which is a difficult burden.  

It is quite possible that Stephen's Estate will be what's called "intestate."  Accordingly, the children will likely inherit under Arizona law.  

Friday, November 1, 2013



            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. 

            This is not an all-inclusive to-do list; however, every trust and/or estate will need to complete the process above.

Tuesday, September 17, 2013


I first published the article below on February 4, 2012.  Since that time there have been major changes to the law on small estate affidavits.  The threshold for real property small estates is now less than $100,000.00 and personal property small estates are now less than $75,000.00.  This is good news as more families can now qualify for the shortened procedures. Accordingly, I decided to republish the article below with the highlighted updates: 


I frequently have people ask me this question: Do I need to probate the estate when my loved one had nearly nothing?

The answer is—like in nearly all legal questions—it depends. When an estate is small, Arizona will allow for mini-probates accomplished by affidavit called a “Small Estate Affidavit.” To qualify for probate by Small Estate Affidavit the estate and the person signing the affidavit (“affiant”) must meet certain qualifications. There are two types of small estate affidavits: (1) Real property, and (2) Personal property.

Real Property Small Estate Affidavit

To transfer real property by Small Estate Affidavit the estate and affiant must meet these qualifications:
1. The affiant must be legally entitled to the property.

2. The value of all real property, less liens and encumbrances, cannot exceed $100,000.00.

3. There must be no probate application pending, or it must be over one year from the closing of an estate or discharge of the personal representative, or no personal representative has been appointed in the past year.

4. Six months must have passed from the decedent’s death.

5. All funeral expenses, unsecured debt, and taxes must be paid.
Personal Property Small Estate Affidavit

To transfer personal property by Small Estate Affidavit the estate and affiant must meet these qualifications:

1. The affiant must be legally entitled to the property.

2. The value of all personal property, less liens and encumbrances, cannot exceed $75,000.00.

3. There must be no probate application pending, or it must be over one year from the closing of an estate or discharge of the personal representative, or that no personal representative has been appointed in the past year.

4. Thirty days must have passed from the decedent’s death.

If you meet the above requirements, a full probate may not be necessary. The best way to determine whether you qualify to avoid probate is to discuss the estate with a qualified attorney.