To Probate or Not to Probate

Probate is the court process which is necessary to distribute assets titled in the name of a deceased person. Probate is not necessary when assets are held in "joint tenants with right of survivorship" or "community property with right of survivorship." The "right of survivorship" term is contractual language which requires the real property or financial account to be transferred to the surviving joint tenant or spouse.

The Probate Court is part of the Arizona Superior Court system. It is charged with the responsibility of verifying that the assets of a deceased person are distributed to the proper recipients. The court identifies those persons by looking at the decedent's Will. If the person does not leave a Will, then the Arizona Revised Statutes sets out a distribution plan, called intestate succession.

Intestate succession provides that a decedent's spouse receives all of the decedent's property, unless the decedent had children who are not children of the current spouse. In that case, the children get half the decedent's sole and separate property and all of the decedent's half of the community property.

If a person dies without a spouse, children or even grandchildren, then the assets will go to the person's parents, and if they are not living, then to the person's siblings, and if they are not living then to a person's grandparents or then aunts and uncles.

Probate is only necessary if a person dies with real property titled in his or her name which exceeds $100,000 or personal property (including stocks and bank accounts) which exceeds $75,000 or expects to receive a wage of more than $5,000 after death. Otherwise, probate is not necessary and the assets can be transferred by affidavit under A.R.S. §14-3971.

The monetary limit does not apply to assets which are held in trust, as "right of survivorship" or with designated beneficiaries, like qualified retirement accounts, life insurance, or pay on death accounts. Those assets automatically pass to the designated beneficiary or joint tenant and probate is not necessary. Similar to accounts with designated beneficiary forms, property will pass outside of the probate process if a beneficiary deed is recorded.

There are two types of probate: formal and informal. Formal probate requires immediate involvement of a judge or commissioner, such as when there is a dispute about whether a Will is actually the Last Will and Testament, or as to who should be appointed personal representative (or executor). Formal probate could also be necessary if the Will did not waive the need for the Personal Representative to post bond. The personal representative is the title we use in Arizona for the executor of a will or estate.

Informal probate is a simpler procedure, initially involving only the court registrar. Just three days after the decedent's death, the designated Personal Representative can file an application to be appointed and obtain Letters of Personal Representative, giving authority over the decedent's assets.

If there is no will and no designated Personal Representative, then A.R.S. §14-3203 sets out the order of who has priority to be Personal Representative; such as the surviving spouse, then certain heirs, the Arizona Veteran's Service Commission and then any creditor but only after 45 days has passed from death or then a public fiduciary.

Once the Personal Representative is appointed, assets are collected. The personal representative must wait four months for any creditor's claims, then the assets can be distributed according to the Will or statutory intestate succession.

The four month period only begins to run once the Personal Representative publishes notice that the probate has been opened. The publication must run weekly for three consecutive weeks in a newspaper of general circulation in the county. However, if the creditor is known or should be known to the Personal Representative, like a credit card holder or a health care provider, then written notice must be sent to such a creditor. Then, then creditor has only sixty days to file a claim.

These are just highlights of the duties of the Personal Representative. The court provides an Order which lists the other duties when the probate is opened. However, most people serve as a Personal Representative only once in their life and are inexperienced. An attorney can provide experience and guidance through the different aspects of probate, including referrals of appropriate services which can make the process easier.