Steps To Administer and Manage Arizona Estate Investments
Data Current as of: 02/25/2013
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Determine Immediate Estate Investment Needs
First of all, as the Arizona estate manager, it should be obvious up front that management of all estate investments should be a very temporary job. As we have already stated, your main job is to protect assets and start the distribution process of those assets (just as soon as you are authorized) to the rightful heirs. But, sometimes, an "elephant" may be in your inventory that is going to throw you off. It may be a multi-unit apartment complex or a commercial building. Or maybe, foreign real estate in Mexico or elsewhere. Perhaps, it is a fantastic home full of antiques you know are valuable...but you are all but clueless on what those items are worth for estate valuation purposes.
The good news is that help is available to assist you in just about anything and everything you discover in your estate inventory. The bad news is, certain items can instantly become burdensome as well as troublesome instantly. And, that can stress you out as well. YOU will have to decide what you feel qualified in managing and what items or investments you will need professional assistance with. This is important, so you are certain you are performing your duties correctly. (If you are the sole heir and estate manager, you can't be liable to yourself so in that case, we will say you most likely can do whatever you want...)
Yes, an elephant still eats, but more realistically, so does a horse, a dog or a cat in the estate home. Animals aren't investments usually, but just like animals -- certain investments require constant attention that is very similar! We can help you find the assistance (no we haven't ever assisted for an elephant) that may be needed to fulfill your fiduciary duty to the beneficiaries of the estate or trust. But we have had clients inherit "elephant" like objects or artifacts that overwhelmed them until we did assist so they could find help and knowledge on how to value the items for internal heir distribution purposes. Or to determine the best way to sell them and convert their true value to cash for the estate heirs.
A commodities investment account, large IRA account, private mortgage loan portfolio, day trader stock account and many other modern and sophisticated investments are perfect examples of investments that require constant attention or special management skills. The deceased estate owner managing these type of investments on their own were fully aware they were high end, sophisticated investments prior to sickness or death striking. And ultimately, they knew they were placing that responsibility squarely on your shoulders! At least until such time you can research the best way to liquidate them (after discussing them with estate beneficiaries and letting them report if they want to keep them), it is YOUR JOB to manage them! And in some cases, they are not easy to liquidate so you would be wise to get professional investment advisor or tax help so make sure principal can be protected for the heirs.
Other investments in the estate are passive and easy and may be addressed well down the path of steps we have outlaid for you in this section. A perfect passive investment would be a tax deferred annuity. Or a bank CD, savings account, or checking accounts that pay interest. Basically, we're talking about those Arizona estate investments that have few or no moving parts that require immediate attention or servicing in order to protect the principal at risk. If you simply remember that your job is not to be someone else such as the deceased estate owner who had vast knowledge and experience about the investment portfolio, but rather, the distribution agent, you will do just fine. And of course, remembering that going to a cash position if heirs don't want to take over shares (you have already learned this is called "in kind") is the first necessary step before you can distribute shares of cash to beneficiaries or a beneficiary. Since your job is temporary and you have to start somewhere, don't worry so much about timing the market or "missing" a high that may develop in a stock, mutual fund, hard asset, or other position the deceased's account may have gotten had you not went to cash. It is your job to liquidate and distribute right? So if for some reason someone complains you missed a high in the market (a market), don't pay them much attention. You can surely bet they will be a lot madder at you if you sit on investment accounts while they go down in value and loose principal! Conversely, they will praise you if that happens after you go to cash.
Note: If a minor trust account is under constant management, the prior paragraph does not apply. In that case, if certain funds are to remain in trust for the benefit of a minor or a disabled child or person, obviously you need to manage the funds. You can contact our office for the basic guidelines of investment management at "court supervised" level. This way you will be protected if you keep or reposition ongoing investment account dollars for these minor or special needs situations in conservative and what a court of law supervising (which will not be if set up correctly) would consider prudent, safe, and proper investments for the specific beneficiary.
Review Mandatory ATC Provisions (Trusts Only)
Warning: ATC Trust Provisions Now Apply (for those with living trusts)
This football is in the air and landing at your doorstep! After a failed attempt with a former "Universal Trust Code", Arizona legislators thought you should have some help and supervision in your job as Successor Trustee or even as Surviving Trustee (and spouse). The law is designed to make sure you do what the state expects you to do. And to provide more court control when you don't....
Pertaining to estate investments that hopefully are all in the trust now (even those that aren't, end up there by the use of a Pour Over Will naming the trust as beneficiary on non trust assets), the only way you can know the estate investment structure is to finish your estate inventory. Tagging each investment or other estate artifact with true "values" or "valuations" or appraisals of unique or unusual assets is important so that the overall "picture" of the estate can be painted not just for you, but for the heirs as well.
If assets are all in trust (or most of them), you most likely are serving as the Successor Trustee of the family trust and that means after January 1st, 2009 deaths -- you will need to study and learn the Arizona Trust Code (ATC) provisions that apply to the trust you are in control of.
ATC provisions may not be drafted in the instrument you are supposed to administer, as many trust owners do not get updated on new Arizona or Federal laws right away and this law is still considered quite new in legal circles. Some lawyers know the last law was squashed and may have delayed providing these provisions in your trust with the thought that history may repeat itself. Because the ATC requires mandatory "notice" to beneficiaries after death if not specifically drafted to exclude this requirement, there is a good chance that task awaits you even as you read this particular Step.
Regardless if YOUR trust includes any recognition of the mandatory provisions, they indeed are controlling now. This is because at least 13 mandatory provisions of ATC apply to irrevocable trusts. And, ALL trusts are irrevocable by design because of mandatory Arizona statutes that freeze them upon the disability or death of the trust maker(s).
This way, bank and investment accounts as well as all other personal and real property gets protected from anyone who might try changing the terms of the trust, such as in the "who gets what?" otherwise known as the beneficiary section. This works even in disability cases where you could wake up from a coma and see that your Successor Trustee has chosen to change your investment accounts, your heirs, etc. all in a way adverse to you and your original trust estate plan. Hopefully, you would wake up and find most of your money and accounts unchanged, as well as YOUR chosen beneficiaries still intact. The law helps protect your trust estate so that the only money missing is discovered that it went directly for your health care or other expenses that go on, even when we become disabled and also when we die.
To learn more general ATC information, read our firm's website designated for education purposes only on why a trust should be updated to include the ATC provisions in "written" format (versus inherent assumed versions that may need expensive and time consuming court intervention) at:
And for the more adventurous (and studious), you can read the actual Arizona ATC statutes at:
Note: Just click "next document" to read each section. If you get lost, go to title 14, Chapter 11 and all the sections in the ATC will be available.
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Real Estate 101: Non Income Producing Property
It is true, we already addressed real estate in Step 17. But, Step 17 was dealing mostly with the estate home which rarely would be considered an estate investment. This section pertains to any other real estate that is in your inventory. Many living trusts have special provisions regarding investment real estate, especially after the death of the trust maker or when married, the surviving trust maker. Whether you have a Last Will, a trust, or had to file for control of an "intestate" estate, the provisions in those trusts are good medicine for all situations so this Step applies to all estate managers for that reason.
The trust provision that applies to most estate situations is the clause regarding the need to assure income is being produced from the real estate you now have listed in your inventory and by this time, which should be fully verified for valuation*. Does it produce income for the beneficiaries? If not, you will want to explore the possibilities to turn if from "non income" producing to "income" producing if there is going to be any long delays in selling the real property in question, or in transferring title "in-kind" to heirs.
If you have a trust and it has this provision, then you as Successor Trustee are bound to convert the real property as this provision applies to if you don't have the ability to transfer it or sell the real estate in a short period of time. How short is that time period? Well, a month or two is not going to cause much alarm most likely with any heir. But 6 months may cause many to ask you what you are doing. Hopefully that gives you a range of what is usual and ordinary regarding this step.
Accessing the property is part of this Step. If you have a piece of land or a bare lot, there isn't much you can do other than list and sell it. Unless you can graze cattle or raise crops on it or generate reasonable income in some other legal way. When there are no valid and easy options, converting to cash is the right thing to do for the maintenance and welfare of any surviving spouse now disabled or for the heirs.
If the property is a rental property that doesn't have a renter and you have a good reason to keep it for estate purposes (or because the probate court hasn't allowed you to sell it), then you at least should try to rent it out. If renovations are necessary, you are or will be authorized to do those too. But, make sure they make sense. Putting more money into any real estate property or building can be smart for enhancing the value (or making it habitable again), but it is very easy to lose money in the process too. We can refer you to qualified advisors or craftsman who can help analyze any real estate situation prior to actually spending estate money.
And lastly, if you have a commercial property or share of a commercial property, and you are not a professional property manager or well versed in commercial real estate -- YOU NEED PROFESSIONAL ADVISORY RIGHT NOW!
Do you remember that we have already stated that your main job was to protect the estate assets, not to make them grow? But, when it comes to real estate, we have to add the typical "notwithstanding other trust provisions" legal language here because survivors need income and heirs expect it! Managing the estate at "trust" level will help assure the best results, even if you don't have a trust...and even though you don't have to do it that way.
For Full Real Estate Valuation and Listing Services, CLICK HERE
* Contact us for free valuations of ANY property in the state of Arizona. (And out of state properties as well)
Fixed Investments 101: Managing Bank and Insurance Products
There is a general attitude during these slower economic times for an estate plan to be made up of beneficial planning instruments only. This is done to try and save money on what may appear to be more expensive legal documents prepared by lawyers, or in some states where approved, authorized legal document preparers. (In Arizona, we are required to be licensed and technically, are considered "certified" by our governing agency, the Arizona Supreme Court.)
Regardless of what kind of estate plan the deceased loved one had, there will most likely be some form of bank, insurance, or IRA type account which is a "beneficiary" product. For some who tried (and perhaps successfully) to avoid probate by having all money accounts pay a "beneficiary" at their death (if they owned a home here in Arizona, this approach also means a "Beneficiary Deed" was also used to transfer the home now).
Of course, normal bank checking, savings, and money market accounts could also be left to the heirs of the estate which is most common. As any "owned" asset at death that does not have a beneficial interest left, they are subject to account titling (joint, fee simple) as to whether or not they are controlled by a surviving person or by the estate itself if not put in trust. Trust owned assets at death are controlled by the living trust and avoid the potential for probate, a very good thing!
Insurance claims in this section pertain to life or accident type
insurance policies but also annuities. To be continued...
Variable Investments 101: Securities, Partnerships, Private
Variable Investments 101: Hard Assets Such as Gold, Other Precious
Metals, Precious Stones
Variable Investments 101: Art, Antiques, Memorabilia, or Other
Collectibles or Colections
Variable Investments 101: Everything Else You May Find Under the Sun
Estate Tip # 10:
The term "Probate" is derived from the atin word "provar"
which means "to
prove". Historically, probate included a process where a Court
needed to ascertain whether the Will is really the Will of the
decedent. It had to be "proved" as to be authentic. As you continue on in the Steps
process, you may have already been asked to prove something you did
was right or correct. If not, you may be called to do so in the
future. And, it just isn't the heirs that may ask this. We
have federal, state, and even the chance that local governmental
authorities or regulators could question something the estate owner
did before they passed away.
And of course, you can't be held liable
for actions of a predecessor regarding estate assets or actions done
before the death. But you can be held liable if you are found
"grossly negligent" for things you did (or didn't do but should
have) after you took over. So, document what you do and if you
aren't sure, get professional help. That way you can pin the
"liability" tail on them if they give bad advice to you as
the estate manager!
element to grasp in this estate tip is to be able to prove what you
do is correct and that in turn, will protect your rear end!
Sorry, but there may not be a nicer way to say that and of course, a
much courser way to make the point if we wanted to go there. (we
Estate Tip # 11:
Estate Tip # 12:
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Back To Steps 1-8,(First Steps & Accounting),
Back To Steps 9-16, (Documents)
To Go Back To Step 17 (Valuation or Listing Estate Real Homes & Properties),
Back To Steps 18-25,(Insurance),
Forward To Steps 34-41,(Distribution), CLICK HERE
To Go Back to the
Main Page, CLICK HERE
graphics, content, strategy and service packages & forms are Copyrighted
© 2009-2013, Financial Strategies, Inc., An
Arizona Corporation, All Rights Reserved.
Variable Investments 101: Securities, Partnerships, Private Placement Products
Variable Investments 101: Hard Assets Such as Gold, Other Precious Metals, Precious Stones
Variable Investments 101: Art, Antiques, Memorabilia, or Other Collectibles or Colections
Variable Investments 101: Everything Else You May Find Under the Sun
Estate Tip # 10: The term "Probate" is derived from the atin word "provar" which means "to prove". Historically, probate included a process where a Court needed to ascertain whether the Will is really the Will of the decedent. It had to be "proved" as to be authentic. As you continue on in the Steps process, you may have already been asked to prove something you did was right or correct. If not, you may be called to do so in the future. And, it just isn't the heirs that may ask this. We have federal, state, and even the chance that local governmental authorities or regulators could question something the estate owner did before they passed away.
And of course, you can't be held liable for actions of a predecessor regarding estate assets or actions done before the death. But you can be held liable if you are found "grossly negligent" for things you did (or didn't do but should have) after you took over. So, document what you do and if you aren't sure, get professional help. That way you can pin the "liability" tail on them if they give bad advice to you as the estate manager!
The key element to grasp in this estate tip is to be able to prove what you do is correct and that in turn, will protect your rear end! Sorry, but there may not be a nicer way to say that and of course, a much courser way to make the point if we wanted to go there. (we don't)
Estate Tip # 11:
Estate Tip # 12:
If You Desire Instant Help - Download Our Services Retainer Agreement CLICK HERE
To Go Back To Steps 1-8,(First Steps & Accounting), CLICK HERE
To Go Back To Steps 9-16, (Documents) CLICK HERE
To Go Back To Step 17 (Valuation or Listing Estate Real Homes & Properties), CLICK HERE
To Go Back To Steps 18-25,(Insurance), CLICK HERE
To Go Forward To Steps 34-41,(Distribution), CLICK HERE
To Go Back to the Main Page, CLICK HERE
Website theme, graphics, content, strategy and service packages & forms are Copyrighted
© 2009-2013, Financial Strategies, Inc., An Arizona Corporation, All Rights Reserved.
Disclaimer: FSI provides estate settlement services to any Arizona estate manager. As a licensed AZCLDP (Arizona Certified Legal Document Preparer), most forms you will need to file in probate proceedings can be prepared for your filing and other procedural needs. If you are administering a living trust, any trust service forms and other procedural needs can again be met by our document preparation services. FSI is also a licensed insurance corporation in Arizona and provides insurance services, consulting and products under that license to you. Other advisory is provided by associated FSI consultants for the real estate needs of the estate, including listing the home or other properties for sale when required. These real estate services are always provided by an individual and separate real estate brokerage firm which is not directly or indirectly associated with FSI. Real estate services are provided solely for the purpose of providing a combined estate package to you so you can work with just one (1) advisor so "meeting" time is greatly reduced over having to meet with multiple advisors regarding estate matters. The Steps and information provided below are for your basic and general "legal" information only and if used without an FSI consultant or other estate professional guiding you, they are provided "as is" for your general education only on the tasks that you may need to perform as an estate manager. It is strongly encouraged that you seek professional help during this process, especially at the first point you feel overwhelmed or become unsure on which direction to take in any of the Steps. Furthermore, the Steps do not apply to every estate situation, they are put in order and stated based on one advisor's opinion only (based on 35 years of estate planning & settling client estates), and the Steps could change at any time in order or content. Therefore, you agree by continuing on this website or using any of the Steps as a "do it yourselfer" manager that you hold harmless the author, company and all company consultants associated with FSI against any damages, costs, fines, fees, censures, penalties, charges, etc. or any other financial or personal harm that may arise from what was deemed the "use" of said Steps to settle an estate without professional guidance. You further understand in using the Steps, you do so for an informational guide only. And, you understand that you must know when a certain step does not apply, and when to simply move on to the next step that does apply to your estate situation. Lastly, NONE of the information provided herein is deemed to be legal advice in any way or format. It is provided for informational and general legal information purposes and can not be guaranteed for accuracy or viability whatsoever as laws and procedures change often. It should not be inferred or assumed that FSI is giving you legal advice. We are not lawyers, so we do not and will not practice law without a license, and give legal advice. However, we encourage legal opinions if contracted for our services EVERY TIME a legal matter comes up and will refer you to an associated law firm or provide general referrals as you may desire if contracted for services.