Most Common Reasons to Open an Arizona Probate
Probate is not required in every case. The following are the two most common reasons a probate is opened in Arizona:
- The decedent’s home needs to be sold, but the buyers cannot obtain title insurance (and thus the home cannot be sold) until the home is transferred out of the decedent’s name; or,
- The decedent owned a large bank account, and the bank will not transfer the account out of the decedent’s name unless probate is opened.
Generally probate is required for the two scenarios listed above, but there are exceptions for small estates. For example, if the decedent owned a home with more than $75,000 in equity, probate must be opened to sell this home. The sales proceeds are then held in an estate bank account for several months until the probate process is complete, then the proceeds are divided among the heirs. If the home’s equity is less than $75,000 probate can sometimes still be skipped, using a document called an Affidavit for Transfer of Real Property. In short, probate is required whenever there are assets (such as real estate, checking or savings accounts, investment accounts, or life insurance proceeds) “locked” in the decedent’s name.
Many assets transfer to the beneficiaries without requiring probate. For example, the following assets skip probate:
- Assets that are jointly owned (such as a checking account by a married couple);
- Assets with “pay-on-death” beneficiary designations; or,
- Assets owned by a trust.
Simply preparing a will is insufficient to avoid probate. A will is still useful to ensure the proper person is named personal representative (which is called an executor in many other states), and to ensure the estate is divided among the proper persons or charities. However, a will does not by itself avoid probate. I recommend clients avoid probate using pay-on-death beneficiary designations, beneficiary deeds for real estate, or by transferring assets into a trust.
Probate is still sometimes needed even if all assets are owned in a manner that skips probate. The following are a few more of the common reasons probate is opened for my clients:
- To determine creditors and to shorten the creditor period.
- Creditors may sue an estate for up to two years following the decedent’s death, unless a probate is opened. Opening a probate and properly publishing the notice to creditors shortens this time period to four months, giving the heirs some peace of mind much sooner than if probate is not opened.
- If assets are unknown.
- Opening probate gives the personal representative the authority to speak with banks or other companies about the decedent’s assets, thus permitting families or heirs to find otherwise unknown assets.
- There is an ongoing lawsuit in the name of the decedent, or the decedent’s estate is involved in a lawsuit.
- For example, probate is often required to carry on a lawsuit in the decedent’s name that was ongoing when the decedent died or if the decedent’s estate becomes involved in another lawsuit after the decedent’s death, such as a wrongful death lawsuit.
- There is a dispute among the heirs or the surviving family.
- For example, one common dispute involves a friend or family member who lives in the decedent’s former home and this home must be sold. This person may have lived with the owner before his or her death, or moved in after the death, but this person has no ownership rights in the home and no permission to live there, yet this person refuses to vacate the home. Probate must be opened to obtain the legal authority to evict this person from the home. Once the eviction process is complete, the home can be sold.
Feel free to contact me so we can determine whether probate is necessary in your situation. Absent a dispute, probate in Arizona is generally easier than probate in most other states. I am happy to help you determine the simplest solution for your situation.