In this weeks article, we wanted to help educate you on the Arizona probate court process, what the word probate actually means, the types of probate, how to avoid probate, and much more.
What does probate mean? Probate or probate court is a very general reference of a court that not only handles matters such as estate and intestate matters, but also guardianship, conservatorship, elderly fraud and physical abuse.
Although a vast majority of this specific article has to do with estate planning, the main thing that anyone should take away is that proper planning is always key no matter what life may throw at you or what you have going on. Litigation is time consuming, can prove to be quite expensive and in the end your primary wishes may be left up to the court rather than your friend, family, beneficiaries or heirs.
Know what you have! One of the best ways to ensure that you know what you and your beneficiary are getting into is to take note of all of your assets. Do they add up to more than $75,000.00? If you make a list or an inventory and know what you have, than deciding what to do next will come much easier for you or you and your estate planner. Let’s get your brain going a little, ready, do you have…
- Property or real estate
- Vehicles including boats, motorcycles, etc.
- Bank accounts, such as checking and savings
- Retirement accounts, pensions, 401K’s, etc.
- Investments, stocks, bonds, etc.
You can see why going through probate with all of these things would be one huge headache! We do have ways to ensure the security of your assets, so if you’ve gotten through this list, noted that you have over $75,000.00 in assets give us a call at (602) 262-4357 or schedule a FREE consultation with us today. Our law firm serves the Phoenix, Scottsdale, Mesa, Peoria, Tempe, Chandler, Avondale, Glendale, Prescott, Paradise Valley, Tucson, Flagstaff, Maricopa County, Yavapai County, Coconino County and Pima County, Arizona areas. If you are not in any of these areas than you can also find an attorney in your own area by taking a look at your local phone book or by simply doing a Google search for “Estate Planning Attorney (enter your city & state here)”.
What types of Arizona probate court proceedings are there?
- Supervised Probates: As the name states, the courts oversee every aspect of the probate process. Any requests such as paying creditors or distributing any types of assets will of course need to be done through the court as well.
- Formal Probates: This type of probate court handles more complex estates, disputes, challenges and other potential charges or allegations. We mention in our “Last Will and Testament” legal service page that although a Will is good step in the right direct that sometimes they can be disputed. Someone can contest a Will and this is where the formal probate court would intervene to help determine the validity (if any) of the claim.
- Informal Probates: The simplest of them all. Informal probate is used whenever a valid Will has not been contested and things are in theory on the “up and up”. This type of probate requires the least of court supervision.
- Small Estate Probate: Personal property is not greater than $75,000.00 and real property cannot exceed $100,000.00.
Other requirements may apply to any of these types of probate proceedings, which is why we typically recommend calling us so that we can assist you specific to your needs.
How do I avoid probate? How can I protect my family, beneficiaries or heirs from probate court in Arizona?
There are several ways to protect your assets from landing in probate court, it really depends on what you have to find out the best ways to protect it. Here are a few things off the top of our head that we may typically try to steer you towards.
- A Last Will and Testament – At the very least everyone should have one. If you do not have a Last Will and Testament, than it may be beneficial for you to have one made up for you. This is a great start to begin to protect some of your assets as long as the amount of assets does not exceed $75,000.00. In general though, wills do typically go through probate. The existence of a will however can help dictate which probate options are available and could have other positive impacts on the estate. Its best to discuss the importance of a will with an attorney so they can help properly asses your assets.
- A Living Trust – Think of a Living Trust as a way to house all of your assets under another name, but still under the same roof. In theory, a Living Trust works by renaming some of your assets into the name of the Living Trust. In Arizona, this is the best way to protect your assets. When developing your Living Trust you will designate a Successor Trustee and upon your death the successor trustee that you’ve appointed administers your estate. For the most part, activities of the Trustee are handled without supervision of the Probate Courts, except in some limited circumstances.
- Joint ownership – The legal terminology that you may have heard before is “Joint Tenants with right of survivorship”. As long as you own the property and you own it with someone else, and the ownership includes the “right of survivorship”, than if you pass away the surviving owner automatically owns that property. There may be some paperwork involved, but the process is simplified in most cases.
- Payable-on-death accounts – These accounts are set up with you controlling the whole account, however upon your death your beneficiary can make claim to those accounts. The beneficiary has no rights to this or other items that you may set aside for a POD account until after your death. A few other examples of a POD or “transfer upon death account” may apply to bank accounts, vehicles, savings, CD’s (Certificates of Deposits), etc.
- Beneficiary Designation Property – This term is specific to any third party accounts that you may have out there. Maybe you have a savings bond, IRA, 401K, pension, profit sharing account, etc. If you remember when filling out the IRA, 401K, etc. paperwork than you are more than likely remember naming a beneficiary. Upon your passing these assets will be passed onto the beneficiary.
Please use this information with caution: We should make a few notes here specifically for joint ownership and payable-on-death accounts. Although this information is useful, it is meant with the intention to be vague. Our articles are to get you thinking about your own personal well-being, not to steer you in one direction or another. There may be other issues specific to avoiding probate, taxes, additional costs, etc. that may have not been mentioned when receiving such funds. Whichever way you choose to help protect yourself from probate, you should seek the advice of an attorney whether its someone with our firm or another firm in your own area first.
If you do have questions regarding your own assets to ensure they do not land in probate, give us a call at (602) 262-4357 or schedule a FREE consultation. We would be more than happy to sit down with you to discuss your specific situation.