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Estate Trust Administration

1.  What needs to be done at death?
When a family member or close friend passes away, you may have immediate questions as to what needs to be done from a legal perspective.

One of the first things to realize is that there is usually no urgency to get something done within the first week or two. The most pressing matters might involve any immediate expenses that need to be paid. Short of that, the personal issues and grieving surrounding the death of the love one can take priority.

Exactly what needs to be done legally as of the date of death will vary on the deceased person’s individual circumstances. One of the first questions is whether a “probate” will be necessary. While “probate”may sound intimidating, it is simply the process by which the court files a Will and appoints someone to act on behalf of the deceased individual, so they can access the decedent’s accounts, pay his bills, sell his property, and distribute assets out to the beneficiaries under the Will.

The person appointed is called the “Personal Representative”, or “Executor.” If an institution requests “Letters Testamentary” or “Letters of Personal Representative”, what they want to see is the document by which the court appointed a Personal Representative under the probate proceeding.

Although Probate involves some legal fees, court costs, and additional time, it is not nearly as onerous, slow, or expensive as some would lead you to believe. If it turns out a probate is necessary, there is no need for the family or beneficiaries to feel intimidated, and a firm like ours will be able to walk you through the process every step of the way.

Some people may have heard nightmare stories of probates that stretch on forever or that involve a great deal of distress and problems. While such events can occur, they arise when family members and beneficiaries cannot agree, there are unusual assets, or the Personal Representative is not doing his or her job in a timely manner.

As part of their responsibility for the estate, a Personal Representative will normally need to prepare the decedent’s last income tax return, and possibly an income tax return for the estate during the period of administration.

If the decedent had a large enough estate to exceed the estate tax exemption (currently $5,430,000), a 706 Estate Tax Return will need to be filed with the Federal Government.  Arizona does not have its own separate estate or inheritance tax, so if an individual in Arizona has less than $5,430,000, no estate tax return will be required — unless a surviving spouse wishes to preserve the decedent’s exemption.

Either in addition to the probate, or instead of a probate, if there are assets that automatically pass to another individual at death, such as joint tenancy property or accounts, life insurance or retirement benefits with a designated beneficiary, etc., then the individuals receiving that property will need to collect it with the appropriate paperwork and a death certificate. If there is a trust involved, the assets held under that trust will need to be administered, sold, and divided as well.

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2.  How can Bogutz & Gordon assist in the estate administration process?
There are many ways our firm can represent family, friends, and beneficiaries after an individual s death, based on the circumstances and the wishes of the survivors.

In some situations, our firm can act as the Personal Representative. This can happen if we are named in the documents, or if the beneficiaries involved agree it would be best to have a professional and independent party act. There is more detail on our capacities in our fiduciary services section.

Our firm can also represent other individuals when they are acting as Personal Representative or Trustee. In those situations, our firm prepares the necessary paperwork for the probate proceeding, attends the hearing if necessary, and then works the individuals step-by-step through what needs to be done, including required publication and mailing of notice, determination of creditors, filing with the IRS and Arizona Department of Revenue, obtaining a Tax Payer Identification Number, determining the applicable periods of limitation, advising on distributions, and eventually closing the trust or estate.

Where necessary we can prepare individual income tax returns for the decedent, income tax returns for the estate, and, for larger estates, prepare the “Form 706″ Estate Tax Return discussed in more detail above.

We offer flexibility in terms of how much work our firm can do. For instance, for some beneficiaries or Personal Representatives living out of state, we can arrange to meet with realtors, set up estate sales, and similar work. On the other hand, other individuals will be available and wish to take care of these tasks themselves, reducing fees that are frequently based on the time we spend on matters.

Above all, we offer the guidance to determine exactly what needs to be done, and help make that happen. You do not need to know exactly what procedures are necessary when you walk into the office, educating you is part of our services.

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