arizona inheritance law

Understanding Arizona’s Inheritance Laws

If you or a loved one dies without a will, the Arizona inheritance laws can complicate the process of distributing your assets. At Phelps LaClair, we can help you leave an inheritance without burdening your loved ones. We can also help incorporate any inheritance you receive into your own estate plan. Continue reading to learn more about inheritance laws in Arizona and what to expect when you leave an inheritance or receive one yourself. 

A Guide to Inheritance Laws in Arizona

Does Arizona Have Estate and Inheritance Taxes?

Some states impose taxes on your estate and/or inheritance, but Arizona is not one of them. If you live in Arizona, your estate will not be subject to an estate tax at the state level. And, although there is a federal estate tax, very few people typically have to pay it, because it only applies to large estates worth millions of dollars. 

State inheritance taxes are determined by where the decedent (the person who died) resided, not the beneficiary. If the decedent lived in Arizona, then you do not have to pay an inheritance tax, even if you live in another state. But, if the decedent lived in a state that does have an inheritance tax, you will have to pay the tax no matter where you live.  

How Does Inheritance Work When There Is a Will?

When someone dies in Arizona with a valid will, the assets are then distributed according to the instructions in the decedent’s will. According to Arizona law, a will is considered valid if it is signed by the decedent and at least two witnesses. 

If the decedent left a trust, then the successor trustee will be in charge of distributing its assets to the beneficiaries. But if there is a transfer on death (TOD) deed for any assets, those assets will automatically transfer to the designated beneficiaries.

If the will does not name an executor to administer the estate, the court will appoint one. The executor is in charge of settling the estate by managing the decedent’s assets, paying their debts, and distributing the inheritance to their beneficiaries. It can take several months for beneficiaries to receive their inheritances, depending on how long it takes to locate the will and settle the estate after someone’s death.  

Who Inherits Assets When Someone Dies Without a Will?

If someone dies without a will (intestate) in Arizona, any assets that do not have a beneficiary designation will be subject to probate. The court then decides who will inherit the decedent’s assets by following the laws of intestate succession in Arizona. 

The court will also appoint someone to be in charge of distributing the inheritance to the heirs. Because the court will have to determine and locate the heirs, it can take much longer to receive an inheritance when someone dies without a will. 

Who Is Considered Next of Kin?

If you die without a will, the probate court will distribute your assets to your next of kin depending on your surviving heirs. Your surviving heirs are a wide range of people, so it’s important to create a will even if you believe you have no heirs. Otherwise, your assets may not end up where you expect.

According to the laws of intestate succession, your estate transfers to your next of kin in the following order:

  1. Spouse: Your spouse will inherit the entire estate if your surviving heirs include your spouse but no children. Your spouse also inherits the entire estate if your surviving heirs include your spouse and children that belong to both you and your spouse.
  2. Children: The estate will be distributed equally among your children if your surviving heirs include your children but no spouse.  
  3. Spouse and children: If your children do not also belong to your spouse, then half of the estate goes to your spouse, and the other half is divided equally among your children. 
  4. Parents: Your parents will inherit the entire estate only if your surviving heirs do not include a spouse or descendants (children, grandchildren, etc.). 
  5. Siblings: If your siblings are your only surviving heirs and there is no spouse, descendants, or parents, then your estate is divided equally among your siblings. 

Can You Disclaim an Inheritance?

In Arizona, you can refuse or disclaim an inheritance for any reason. For instance, you may wish to disclaim an inheritance if the amount would disqualify you from government aid or place you in a higher tax bracket. However, there are many rules to follow when making a disclaimer, so it’s best to consult an estate planning professional beforehand.  

Inheritance Planning in Arizona

Whether you wish to leave an inheritance or have recently received one, it’s important to understand the inheritance laws in Arizona. At Phelps LaClair, we can help you add your inheritance to your estate and design an estate plan that avoids probate. We can also help you administer a loved one’s estate to ease the burden of distributing the inheritance to others. Call 480-892-2488 today to schedule your free consultation.

Images used under creative commons license – commercial use (5/18/2022). Photo by Emma Bauso from Pexels

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