We are an Arizona Estate Planning law firm specializing in probate matters, contact us if you have any questions about probate.
What is Probate?
Is it necessary if there’s a will?
We know how stressful and difficult it is winding down the affairs of a loved one. We’re here to provide information and answer questions about the legal process colloquially known as probate.
Technically probate is the proving of a will. It is the process whereby the will is presented to a court who determines that the will accurately represents the final wishes of the decedent and the process of estate administration may begin under the direction of the nominated personal representative.
Colloquially, probate is known as the legal proceeding whereby the decedent’s debts are settled and the residue distributed to the heirs in kind or liquidated and divided. It is our final accounting. It is a necessary process because without probate, there is no method to force banks, the DMV, or other institutions to retitle accounts, vehicles, and other assets. And because such institutions hate risk, they are simply not going to retitle the accounts just because you presented them with proof of death.
However, these days it’s not that simple. First, not all estates go through the formal probate process. For example, small estates utilize a simplified probate procedure whereby affidavits are used to transfer assets to the heirs. If a revocable trust was established during the decedent’s life and properly funded, the estate administration is conducted through the terms of the trust and may bypass the courts completely. Finally, assets with beneficiary designations attached pass by operation of law or contract and are not a probate asset.
While the nominated personal representative can file probate on their own, having an expert help you quickly sort through which assets are subject to probate and which are not can give you peace of mind and save you time. If there isn’t a will, then the probate process will proceed through intestacy. When there isn’t a clear default executor, you’ll want expert advice on how best to proceed. Give us a call if you have any questions as to the nature of the assets or how to proceed with filing for probate or if it’s even necessary.
Can I Avoid Probate? Can I Save My Heirs from Probate?
Unfortunately, if the testator did not plan correctly, there is no way to avoid probate unless they had very little assets to collect. In Arizona, a process exists to collect small accounts, cars, or other titled assets. By use of a small estate affidavit, the nominated personal representative or presumptive heir may present a properly filled out affidavit (along with a copy of the will and death certificate) to the holder of the property who then must turn over the assets. A similar streamlined process is utilized for real estate.
The limits for using the affidavit is $75,000 for personal property and $100,000 after liens and encumbrances, for real estate. If your estate is estimated to be larger than the above figures, the best way to avoid probate is to have a comprehensive estate plan which will utilize a living revocable trust, beneficiary designations, and other contractual transfers to avoid having to go to the court to transfer title to your assets to your heirs.
The Different Types of Probate
Depending on the size of the estate and the particulars of the situation, different types of probate are available.
1- Formal Probate
The worst form of probate is formal probate. If you find yourself in formal proceedings, there is a dispute in front of the court which needs to be resolved. In formal proceedings, all of the formalities and accountings must be followed. The entire process is overseen by a judge and you’ll need judicial permission to distribute the assets.
2- Information Probate
Informal probate is the form of probate the vast majority of estates go through in Arizona. It requires quite a bit of court filings and it’s certainly annoying and can take a while to assemble and file all the required paperwork. That said, informal probate is not terribly difficult or expensive to prosecute, and hiring an experienced attorney will take the burden off of you and ensure everything is done correctly and quickly.
3- Ancillary Probate
An ancillary probate is a semi-rare form of probate. It is the probate of in state assets for an out of state decedent. In other words, if you die in Arizona, but have real property in New Mexico (or Canada), an ancillary probate will be required to transfer your New Mexico property to your heirs.
4- Summary Probate Administrative Procedure – Small Estates
A summary administration in Arizona is not a specific type of probate, but rather a specific means to quickly end the probate process. A summary probate is available when the probate estate value is less than the exemptions plus the costs of administration and reasonable final burial costs. Summary administration allows the personal representative to quickly end the probate process once all the assets are gathered.
5- Small Estate Affidavit
The small estate affidavit is not exactly a type of probate at all, but it’s a means to circumvent probate. The affidavit is a means to collect property without having to go through informal probate. It is a much simpler process, but is restricted to estates’ whose probate assets total under certain amounts. $75,000 in liquid assets and $100,000 net real estate minus encumbrances.
Our goal is to simplify the process by handling all the details and assisting you with the hard decisions necessary to complete probate and distribute the assets.
Duties in Probate
The personal representative’s duties in probate are threefold:
- Gather the assets
- Pay the estate’s debts, and
- Distribute the residue to the beneficiaries.
Gathering the estate’s assets is usually a simple procedure once letters of representation are issued by the probate court. The rest of the process involves negotiating with any creditors who make claims and then distributing the remaining assets.
How Much Does Probate Cost?
The costs associated with probate vary. On the low end, they are not too dissimilar with the cost of executing a revocable trust to avoid probate. But on the upper end of the cost spectrum, litigation costs can exceed six figures in the most hotly contested cases.
The difficulty of probate lies in having to fill out all the forms correctly and dealing with creditors and how to distribute the assets. The goal of probate should be a minimization of conflict and a preservation of family harmony.
How Long is the Probate Process?
How long probate lasts depends largely on the size of the estate and the ability to easily locate all the heirs and determine all of the debts. However, the minimum amount of time necessary to bar creditors is four months from publication, so in general, probate and any estate administration ought to take about five months in order to ensure no creditors crop up out of the woodwork and demand payment.
In nearly all estates with more than one heir, there will be some sort of disagreement amongst heirs or amongst heirs and creditors. Usually, these are sorted out amongst each other amicably. But in some circumstances, the dispute can turn into full blown litigation.
A trained professional administrator is able to foresee and forestall many such conflicts. We are also able to effectively negotiate with third parties and mediate conflicts between beneficiaries.
Probate and Estate Tax Obligations
While there are no Arizona estate taxes, the federal government still imposes a tax on wealth transfers above a certain threshold.
Do I Need a Lawyer to Probate an Estate?
While you don’t need a lawyer to probate an estate, hiring an attorney will save you aggravation and streamline the process. While there is nothing technically difficult with probating an estate, there are a lot of formalities that need to be complied with. Knowing the process inside and out makes for a quicker probate, streamlined distribution, and peace of mind knowing it will be done correctly and fairly. Give us a call if you’d like to find out how we can help you get back to living life.