when is probate required

When Is Probate Required in Arizona?

Probate is the legal process of validating a will, settling a deceased person’s debts, and distributing their assets to heirs or beneficiaries. The court oversees this process to ensure that is properly carried out. Probate can take over a year and involves expensive court fees that can be a significant burden for your loved ones. Luckily, not all estates have to go through probate in Arizona. Understanding when probate is and isn’t required can help you create an estate plan that avoids this process. We put together this guide to help you design an estate plan that avoids probate and gives your family peace of mind. 

When Is Probate Required in Arizona?

Probate is required in Arizona if the decedent (deceased person) owned any assets that did not have beneficiary designations at the time of death. Probate is also always required for wills because the court must verify that the document is valid. If you die without a will, your estate will still be subject to probate if you have any probate assets. 

Probate is also required for large estates with assets valued at a total of over $75,000 and/or real estate worth over $100,000. Even if your estate exceeds this threshold, it’s still important to draft a will to ensure that the probate process is short and goes smoothly for your family. However, placing your assets in a trust can reduce the size of your estate and help it avoid probate.

If an estate does not exceed this threshold, a family member will need to submit an affidavit to the county court in order to go through the more simplified probate process for small estates. The affidavit must list an inventory of the assets in the estate as well as the names and addresses of family members and a copy of the decedent’s will. After the court grants the affidavit, the executor can start administering the estate without the need for court proceedings. 

What Happens When an Estate Goes through Probate?

If you name an executor in your will and your estate is subject to probate upon your death, then the executor must file a petition for probate. If you do not name an executor, the court will name an administrator for your estate. However, a friend or family member can petition the court to name them as the administrator. 

When your estate goes to probate court, your will goes through verification and then your assets will be distributed accordingly. If your estate goes to probate without a will, the court distributes your assets via the laws of intestate succession. Your assets will automatically go to your next of kin, giving you no control over who receives which assets. 

Which Assets Are Subject to Probate?

Individual bank accounts, real estate property, and all personal property (including vehicles, collectibles, etc.) are all subject to probate. When assets pass through probate, the heirs cannot receive them until the probate court transfers the title of ownership. 

However, there are many assets that are not subject to probate. Non-probate assets such as bank accounts, life insurance policies, and retirement accounts that have a beneficiary designation will automatically transfer to the beneficiary and avoid probate. Real estate property that’s held in joint tenancy or as tenants by the entirety—two ways of jointly owning property—is also not subject to probate. Placing assets in a living trust can turn them into non-probate assets. 

What Happens If the Executor Doesn’t File Probate?

If probate is required for your estate and the executor does not file the petition, they will be held personally liable. Before you name an executor, make sure that they fully understand the responsibilities of their role and what can happen if they don’t fulfill their duties. Failing to file probate can leave assets vulnerable to theft and lead to investment losses. The assets in the estate will likely be frozen until the estate is liquidated.

If you’re an heir to an estate that’s subject to probate and the executor hasn’t filed, you can take action. All you need to do is file a petition to open probate yourself. 

How Can Your Estate Avoid Probate?

The best way to ensure your estate avoids probate is to place your assets into a living (revocable) trust or a qualifying type of irrevocable trust. Your assets will immediately transfer to your beneficiaries upon your death, if that’s what the trust dictates. You can also set up your trust so that your beneficiary receives their inheritance in installments or when they meet certain criteria, like turning eighteen.

Assets in a living trust still belong to you. As a result, you can continue to access and manage them during your lifetime. But after your death, the living trust automatically becomes irrevocable. Your successor trustee will then be in charge of distributing the assets in the trust to your beneficiaries.

With an irrevocable trust, the trust is the owner of the assets. You can create an irrevocable trust during your lifetime, but you cannot access or remove any of the assets. However, the assets within will remain safe from creditors because they are no longer in your name. 

Probate and Estate Administration in Arizona

Whether you want your estate to avoid probate or need help administering an estate that’s subject to probate, the experts at Phelps LaClair can assist you. We’ve been working with families in Arizona for over 40 years to help their estate avoid probate. We’ll help you and your loved ones find peace of mind when it comes to probate court and settling your estate. Call 480-892-2488 today to schedule a consultation in Mesa, Chandler, or one of the surrounding areas.

Images used under creative commons license – commercial use (6/16/2022). Photo by Sasun Bughdaryan on Unsplash

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