If you are exploring probate options to minimize the tax burden on your heirs and to simplify the process of distributing your assets, understanding Arizona probate law is important. Here’s what you need to know about informal and formal probate Arizona rules.
Disclaimer: Please note that this article is not intended to be legal advice. You should always talk to an attorney who is skilled at estate planning about your unique situation.
When is probate required in Arizona?
In Arizona, probate is the process that validates a will, distributes assets, settles debts and liabilities, and otherwise carries out the final actions of an estate. Probate is covered in Title 14, Chapter 3 of Arizona law regarding trusts, estates, and protective proceedings.
There are three types of probate in Arizona:
Major differences in each will be discussed below, but it’s important to understand that Arizona law specifies the amount of court involvement in each type of probate process.
Do all estates go through probate?
Not every estate will require the probate process. You may be able to organize many of your assets to pass on to your heirs without going through probate, for example:
– Assets included in a trust
– Property held in joint tenancy, because the surviving owner of property or assets becomes the sole owner
– Community property with right of survivorship
– Payable-on-death bank accounts that transfer to the beneficiary when the account holder passes away
– Assets registered in transfer-on-death forms and real estate transferred by a transfer-on-death deed
– Life insurance policies or annuities
– Retirement accounts
Probate is generally necessary for any assets or liabilities that are not accounted for in one of the ways above, as well as for most wills.
Informal vs. formal probate in Arizona
Informal probate versus formal probate in Arizona has to do in large part with the amount of supervision required from the courts. Here are the major differences between the two.
The requirements of each
Informal probate means the personal representative of the will can distribute the property and assets of the estate with minimal supervision by the court. It is usually a quicker process. An overview of this process is explained below.
For the court to approve the informal probate process, the will must, among other things, be valid, as determined by the court (Title 14-3303), and uncontested.
Formal probate generally occurs if there is no will for an estate or when someone contests the will. The absence of a will makes the estate “intestate.”
Who is eligible to request?
For either formal or informal probate, someone must request probate. Informal probate can be requested by certain family members, other heirs, or a personal representative, among others (Title 14-3301).
Formal probate is mandated by the Arizona courts if the will does not meet the requirements for informal probate. Any “interested person” or a personal representative can petition the court to initiate formal probate if they wish to contest the will (Title 14-3401). According to Title 14-1201, an interested person includes:
“any trustee, heir, devisee, child, spouse, creditor, beneficiary, person holding a power of appointment and other person who has a property right in or claim against a trust estate or the estate of a decedent.”
How much does it cost to initiate probate proceedings?
It stands to reason that the more court supervision that is required, the higher the cost will generally be. For this reason, informal probate is the least contentious (and least expensive) type of probate.
Formal and supervised probate require more time and attention (and thus more legal fees).
When is supervised probate necessary?
Supervised probate can be requested by interested persons (Title 14-3502). In this type of probate, the court oversees the personal representative and his or her administration of the distribution of assets (Title 14-3504).
Supervising probate may be found to be necessary when:
– The decedent requests it in his or her will
– An estate’s debts are higher than its assets
– There is legal action against the estate
– The court finds it necessary to protect the decedent’s estate
Other circumstances may also make it necessary. Supervised probate is the most expensive and lengthy type of probate, but it is also the least common.
What is the probate process in Arizona?
The probate process begins when a person dies and their personal representative (in other states sometimes referred to as their executor) files a petition for probate with the court.
1: The court authorizes the personal representative
The court gives the personal representative letters of appointment that allow the personal representative to act on behalf of the estate.
You can learn more about personal representatives and their responsibilities here.
2: Provide notice and take possession of the estate’s assets
The personal representative must notify interested persons of the deceased’s passing.
They may also take possession of the estate’s assets and property, when necessary. For example, if an heir is to receive the family home and is already living there, it may make sense for the personal representative to leave things as they are.
3: Create an inventory of assets
Under Title 14-3706, the personal representative has 90 days to prepare a complete inventory of the deceased’s property. This includes noting the fair market value of the property, any liens, and whether it is held in community with another person.
Interested persons can request a copy of this inventory. If other property is discovered after this inventory, or the value changes, the personal representative must file a supplemental inventory, noting the changes.
4: Manage the estate during the probate process
The personal representative makes sure that others don’t use or transfer assets during the probate process, except as approved by the personal representative or allowed by the court.
The personal representative may also be responsible for paying any required taxes or expenses out of the estate’s funds.
Are there other ways to avoid probate?
The probate process can be time-consuming and costly for the estate, especially if formal or supervised probate is required.
Small estates can avoid probate altogether by filing an out-of-court affidavit that states one of the following:
– The value of all personal property in the estate, after debts are paid, is $75,000 or less (Title 14-3971.B)
– The value of all Arizona real estate in the estate after debts, is $100,000 or less at the date of death (Title 14-3971.E)
For the first situation there is a 30-day waiting period, and the second has a six-month period. It’s a good idea to talk to an experienced estate planning attorney to see if your situation qualifies.
Find help with Arizona probate laws
Executing a last will and testament is not always easy. Each situation is unique and brings with it different challenges.
ARTEMiS Law Firm has the experience you need to guide you through all aspects of estate planning, from writing your will to helping you through the probate process. Get in touch today to see how we can help.