Recent Changes to Arizona Informal Probate Law and Procedure

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In 2011, there were a number of changes in both statutes and rules of procedure relating to probate in Arizona. While the lion’s share of these changes affect Guardianship and Conservatorship proceedings,  some of them apply in Informal Probate cases and a few have resulted in changes in the AvidLaw Probate forms. This article summarizes some of the changes that impact Arizona informal probate practice.

New laws and rules about fees and budgets. If you have paid attention to the news about changes in the laws and rules, you have no doubt heard about new requirements with respect to attorneys fees and to budgets required to be filed in some cases. The fee changes (see ARS 14-5109 and 14-5110) affect guardianships and conservatorships, but do not currently affect informal probate practice. The changes requiring the submission of a budget (see ARPP Rule 30.3) affect only conservatorships. It appears, however, that the Statewide Fee Guidelines, expected to come out in September, will apply to attorneys for Personal Representatives. When that happens, we will deal with them in the software.

The following changes that have taken place over the last year or so affect informal probate practice.

ARS 41-313 has been amended to require additional information to be included with a notarial certificate “if a notary attaches a notarial certificate to a document using a separate sheet of paper.” Some practitioners have raised concerns about the vague nature of this language. The AvidLaw Probate forms now give users an option to always include the additional information with notarial certificates or to omit this information. It may be helpful to review this provision in determining when this additional information is appropriate for documents you draft.

ARS 14-1104 now specifically requires fiduciaries to consider costs when making decisions about how to act, and to make reasonable decisions to limit those costs. This statute has been revised to require personal representatives to apply cost/benefit analysis in decisions relating to administration of the estate. Any will provision that directs otherwise will apply. It is possible that this provision will lead some testators to include in the will sufficient direction to allow the personal representative to accomplish the testator’s wishes where a pure cost/benefit analysis might not be appropriate. This change should be considered in the representation of personal representatives, but it has not caused any changes in the AvidLaw Probate forms.

ARS 14-1105 allows parties or attorneys to be charged with some or all of the costs that are incurred because of their “unreasonable conduct.” Similarly, the new Rule 10(G) in the Arizona Rules of Probate Procedure provides for remedies in the case of “vexatious conduct,” including a prohibition against filing pleadings and other papers without first obtaining a court order. Also, ARS 14-1109 allows the court to rule on a repetitive filing before responsive filings and without a hearing. These provisions should be explained to clients who might otherwise want to engage in “unreasonable” or “vexatious” conduct or in repetitive filings. These provisions have not, however, caused any changes in the AvidLaw Probate forms.

ARS 14-1108 encourages alternative dispute resolution in probate cases. It not only encourages arbitration, but also other options. As with the other statutory and rule changes discussed so far, this change did not affect any AvidLaw Probate forms.

ARS 14-5652(B) requires any attorney who is acting as the personal representative (or as a trustee) to disclose in writing to everyone with an interest in the matter the names of anyone with an interest in the matter for whom the attorney either is performing or has previously performed legal services. This disclosure is required within a reasonable time after the attorney learns that the client or former client has an interest in the estate. This means that an attorney serving as personal representative must make such a disclosure upon learning that a client or former client is a creditor, heir, devisee, or some other person with an interest in the estate.

Rule 8 of the Arizona Rules of Probate Procedure now sets forth specific consequences that can apply in the case of a failure to serve required notice on an interested party in a probate action. The court has the option to dismiss the case without prejudice, to require service within a specified time. The provision allows the court to extend the time for service for good cause shown.

Rule 10(D)(1) of the Arizona Rules of Probate Procedure requires the attorney for a Personal Representative to “encourage the fiduciary to take those actions the fiduciary is authorized to perform and can perform competently on the fiduciary’s own to fulfill the fiduciary’s duties.” While this provision hasn’t changed any AvidLaw Probate forms, it may be good practice for practitioners to edit engagement letters to include such encouragement, at least generally, and perhaps to discuss some specific actions that clients might take.

Rule 15.2 of the Arizona Rules of Probate Procedure establishes proceedings for lack of prosecution. In general, the court must issue a notice of impending dismissal two years after the case is filed unless a closing statement, a petition to settle the estate, an order terminating the appointment of a special administrator, or an order extending the administration of the estate. Cases will be dismissed 90 days after the notice has been issued unless one of the items discussed above has been filed or there has been a request for hearing or conference, a petition to terminate the appointment, or a status report describing unresolved matters. A similar process takes place six months after filing if there has been no action or hearing in the case. Dismissals under this rule are without prejudice. No AvidLaw Probate forms have been changed due to this rule.

Rule 22(A) of the Arizona Rules of Probate Procedure requires each order appointing a personal representative (including a statement of informal probate) to include a warning that the appointment isn’t effective until letters are issued. The applicable AvidLaw Probate forms have been modified to include this warning.

Rule 22(C) of the Arizona Rules of Probate Procedure has specific provisions relating to restricted accounts. This rule requires certain wording in the letters of any fiduciary for whom funds will be restricted. The AvidLaw Probate forms don’t deal with restricted accounts in informal probate cases, because there is rarely a bond requirement, so property is seldom restricted. However, if you have such a case, you should be aware that the language of the letters needs to comply with this rule.

Rule 22(D) of the Arizona Rules of Probate Procedure has provisions similar to those of Rule 22(C) with respect to restrictions on the authority to transfer or manage real property.

Rule 27.1 of the Arizona Rules of Probate Procedure requires all unlicensed individuals (and some entities) to receive training prior to serving as Personal Representatives. This rule, which is effective on or after September 1, 2012, will require changes to the AvidLaw Probate forms. AvidLaw will make these changes by the time the rule becomes effective.

AvidLaw is pleased to be able to provide general explanations of law changes to those who use our forms. We look forward to any comments you may have about these changes and how they affect your practice.