Four Ways to Avoid Probate in Arizona

Probate is the court process where your belongings pass to your family after you pass away. Because probate can be expensive and time-consuming at a stressful point in your loved ones’ lives, it’s often better to avoid probate if you are able.

Additionally, because probate is a court process, all submitted documents are part of the public record, which can be disconcerting to some.

There are a number of legal tools to limit the extent that probate is necessary, and avoid the complications of going through this process.

1. Create a Trust

One common way to avoid probate is to create a revocable living trust. When you have a trust, you either retitle your assets into the trust or name the trust as a beneficiary of your assets. Either way, anything “linked” to the trust will avoid probate.

Creating and funding a trust can take time, so do not put this off until the last minute. You should give yourself at least six months, if not longer, to create the documents and transfer assets into the trust.

2. Designating Beneficiaries

Another way to avoid probate is to designate beneficiaries on all financial accounts, including bank accounts, life insurance policies, 401ks, IRAs, and other brokerage accounts. In this way, your accounts will avoid probate because they are private contracts between you and the financial institutions.

When an account is beneficiary designated, also known as payable on death, it can be automatically and immediately transferred to the named beneficiary upon receipt of a certified copy of the death certificate. These accounts will remain in your name, and the beneficiaries will have no control over them until you die.

When filling out the paperwork for these accounts, you can name one or more beneficiaries, as well as a primary and secondary beneficiary.

In Arizona, you can also designate a beneficiary on death for your motor vehicles. By utilizing this process, you can transfer any cars or other vehicles to named beneficiaries without going through the probate process. In order to claim the vehicle, the recipient will need to present:

• The beneficiary on death form
• A certified copy of the vehicle’s title
• A certified copy of the death certificate

Arizona is one of a handful of states that currently give vehicle owners this option. Just be aware that if you owe money on your car, so you do not have title, you can’t use this MVD form until the car is free and clear.

Although each of these beneficiary forms can be completed easily within a few days, there often comes a point where our aging relatives are no longer mentally capable of signing financial or legal documents. Receiving a diagnosis of Alzheimer’s disease or dementia can call into question the legality of these documents. By delaying too long, you may end up foregoing this benefit.

3. Titling Property to Avoid Probate

If you own a home or other real estate, you can title the deed in a way to avoid probate. Arizona recognizes two forms of joint ownership that have rights of survivorship:

• Joint tenancy with right of survivorship allows two or more joint owners to have an equal share of the property. When one owner dies, that owner’s share in the property automatically rolls over to the other joint tenants.
• Community property with right of survivorship is similar to joint tenancy, in that the deceased spouse’s share automatically passes to the surviving spouse, but it is only available to married couples.

Other states allow a third form of ownership known as tenancy by the entirety. This form of ownership is only available to married couples but otherwise works similarly to joint tenancies.

4. Utilizing Small Estate Court Proceedings

Finally, depending on the size of your probate estate you may be able to take advantage of Arizona’s small estate court proceedings. Under state law, this modified version of probate procedures is available to estates owning real property less than $100,000, or personal property worth less than $75,000.

An heir of the estate may claim this benefit by filling out a small estate affidavit.  If the small estate affidavit involves real estate, it needs to be recorded at the County Recorder. If the small estate affidavit involves personal property (like accounts, insurance, etc.), the affidavit just needs to be signed and notarized. There is no need for any court involvement.
This article does not provide legal advice. To discuss your estate plan, and how you can limit or avoid probate proceedings altogether, please contact me to set up a consultation today.

An heir of the estate may claim this benefit by filling out a small estate affidavit.  If the small estate affidavit involves real estate, it needs to be recorded at the County Recorder. If the small estate affidavit involves personal property (like accounts, insurance, etc.), the affidavit just needs to be signed and notarized. There is no need for any court involvement.

This article does not provide legal advice. To discuss your estate plan, and how you can limit or avoid probate proceedings altogether, please contact me to set up a consultation today.