Introduction
When someone dies, their beneficiaries have up to two years to open probate. Once probate is opened, there aren’t any time limits that will cause the case to expire. A probate judge may issue deadlines to hold the estate’s executor responsible, but the court will generally allow a reasonable amount of time for the executor to handle the estate’s affairs.
That amount of time will vary from case to case depending on the complexity of the estate, contests to the will, and objections to the executor’s activities. If the estate needs to sell illiquid, hard-to-sell assets, the court is usually pretty generous and can allow several years to find a buyer who is willing to pay the fair market value (e.g. with real estate, art, jewelry, or collectibles).
How Long Does Probate Usually Take?
When probate is opened, the executor will be required to service notice of probate to the decedent’s beneficiaries and creditors. The executor will also be asked to publish an official notice of probate proceedings in the local newspaper each week for three weeks. Creditors with claims against the decedent’s estate are given four months from the date the first notice to submit their claims to the executor. As long as there aren’t any contests to the will or objections to the executor’s actions, the executor will be allowed to settle the estate at the conclusion of the four-month waiting period. That means an executor who is on top of their responsibilities could theoretically wrap up probate in as little as four months. That said, most informal probate cases in Arizona take about 6 – 8 months.
When there are disputes and contests to the will, the court will need to take on a more active role in the probate process. Depending on the amount of supervision that’s required, formal probate (the legal term for supervised probate) can take a year or longer to settle an estate.
What Happens in Probate?
If you’re questioning how long it takes to probate an estate, it helps to understand what actually happens during the probate process. While some cases will certainly be more complex with additional steps, the probate process can be boiled down to five core tasks:
- Validate the will
- Appoint an executor
- Gather the estate’s assets
- Settle the estate’s liabilities
- Distribute the assets to the beneficiaries
Validating the Will
If the decedent left a will, the court will need to validate the document. A clerk will check to make sure the will is properly signed and dated by the testator and two witnesses (ARS 14-2502). If the will is handwritten (holographic), the court will need to verify that the signature and the material provisions in the will match the testator’s handwriting. If any interested parties believe the will was forged, drafted under undue influence, or drafted by a mentally incompetent adult, the court will hold a hearing to assess the will’s validity.
Appointing an Executor
A proper will should nominate someone to serve as the estate’s executor (aka the personal representative). The executor will be tasked with handling the affairs of the estate through the probate process. If the decedent didn’t leave a will, or if the nominated executor is found to be unqualified, the court can appoint an administrator to serve as personal representative instead. The administrator is usually another qualified family member or friend, but in some situations the court can appoint a third-party special administrator.
Gathering the Estate’s Assets
The executor will need to take inventory of the decedent’s assets and determine their fair market value. Liquid assets like stocks, bonds, and bank accounts are easy to value with the most recent account statements, but illiquid assets such as a house, vehicles, art, and jewelry will need to be professionally appraised. If the will directs that any of the assets are to be liquidated, the executor will be authorized to sell the assets and gather the proceeds into an estate checking or savings account.
Settling the Estate’s Liabilities
Before any of the assets can transfer to the decedent’s beneficiaries, the executor will need to settle all of the estate’s debts, bills, and taxes. Again, creditors have four months after the initial notice of probate to file claims against the estate. The executor will need to file a final income tax return for the decedent, and (if applicable) pay any required estate taxes. If the estate is insolvent (meaning there are more liabilities than assets), the court will work with the executor to determine which bills and creditors have priority for payment.
The Estate’s Remaining Assets are Distributed to the Beneficiaries
Once all of the estate’s liabilities are settled, the executor will need to file an accounting and report of their activities with the probate court. With the court’s approval, the executor will then be free to distribute the remaining assets according to the decedent’s will. After the assets are transferred, a judge will close the estate and end probate.
What Happens After Probate is Closed?
When an estate is closed, the actions of the executor and the probate court are binding and conclusive. Interested parties have six months from the time of closing to file an objection to the executor’s activities, and they’ll have up to a year after closing to petition to reopen probate (usually to contest a will’s validity), but it’s extremely difficult to reclaim assets that have been legally transferred to beneficiaries.
Is it Possible to Skip Probate?
There are two conditions where an estate can bypass probate. First is the small estate exception. In Arizona, estates with less than $75,000 in personal property and less than $100,000 in real estate are exempt from probate. Qualifying small estates can handle settling the estate’s liabilities and distributing the assets outside of probate court by submitting a small estate affidavit. The court will need to approve the affidavit, but the process is significantly faster than going through probate court.
The other case takes place when an estate includes assets that have a contractual beneficiary attached to the asset(s). If a beneficiary is listed on the account, the financial institution holding the property will automatically transfer the property to the beneficiary upon the account owner’s death. Some examples of assets with a contractual beneficiary include:
- Bank and brokerage accounts with a transfer-on-death or payable-on-death beneficiary
- Real estate owned in joint tenancy or as tenants in the entirety
- Retirement accounts (401k, IRA, etc.)
- Life insurance policies
- Trusts
Note that in this case, only the assets with a contractual beneficiary are allowed to transfer ownership outside of probate. If the estate has individually-owned real or personal property, or real estate owned as tenants in common, those assets will still need to transfer through probate.
Call our Probate team at (480)467-4365 to discuss your case today.
