Introduction
If your husband left a will, you’re legally obligated to submit his will to the county probate court, though you’re not necessarily required to petition to open probate when you submit the document to the court. The question of whether or not probate is necessary will largely depend on the assets he left behind, and whether or not there are any creditors demanding payment from his estate.
What is Probate?
Probate is the legal process of settling and closing the estate of a deceased individual (known as the decedent). When the decedent leaves a will, the court will probate the estate according to the directions in the will.
If the decedent died without a will, that means they died “intestate,” and their estate will be probated according to the state’s intestate succession laws. That said, not all assets are subject to probate, and it’s not uncommon to see situations where a decedent’s estate doesn’t have any assets that need to be transferred to heirs through the court. In such cases, probate would only be necessary to arbitrate creditor claims and formally close the estate.
What Assets Constitute an Estate?
Arizona is a community property state. Any assets acquired during the course of a marriage are shared equally between spouses, with each party having a 50% share of the joint estate (ARS 25-211). Assets that a spouse acquired before they were married are retained as separate property unless the assets are comingled with joint assets to the point that they cannot be distinguished, in which case they’d be considered community property (ARS 25-213).
When a spouse passes away, their individual estate consists of their 50% share of the joint estate along with any separate assets that were acquired before the marriage.
Which Assets Are Subject to Probate?
Probate is only necessary for assets that are titled in the decedent’s name. Common examples of individually-titled assets include:
- Individual bank and brokerage accounts
- Real estate owned individually or as tenants in common
- Personal property such as vehicles, art, jewelry, and collectibles
These assets cannot transfer title of ownership to the decedent’s heirs without a court order from a probate judge. Most of the time these assets are bequeathed in the decedent’s will, and the court will transfer the assets to the beneficiaries listed in the will. In the absence of a will, the court will transfer these assets to the decedent’s legal heirs according to the state’s intestacy laws.
Which assets can transfer ownership without probate?
Assets that have a designated beneficiary listed on the account are designed to automatically transfer title of ownership without going through probate. Common examples of non-probate assets include:
- Joint accounts with rights of survivorship
- 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
To initiate the transfer of a non-probate asset, someone will need to submit a copy of the decedent’s death certificate to the financial institution that’s holding the assets. While probate can easily take 6+ months to transfer assets, non-probate transfers can wrap up in as little as a few weeks, making them significantly faster and cheaper (in terms of court costs) than going through probate.
With proper planning, most (if not all) assets can be positioned to transfer to beneficiaries outside of probate.
Creditor Claims and Bills
Generally speaking, if there are no assets that require probate then the only other reason probate may be necessary is to deal with creditor claims against the estate, or outstanding bills. Once you open probate and submit proper notice to all of the estate’s interested parties, creditors will have four months to file a valid claim against the estate.
After four months, the estate is free to close once the submitted claims have been settled and all assets have been distributed. Once an estate is closed creditors won’t be able submit any additional claims against the estate, so probating and closing an estate promptly is a nice way to shut the door on any future creditor claims.
If you don’t open probate and close the estate, creditors have up to two years to file claims against the estate. Keep in mind, however, that as the decedent’s spouse any debts that were incurred during the course of your marriage are also considered to be your debts, and the statute of limitations on creditor claims wouldn’t apply until you pass away.
What to Do If Probate is Necessary
If your husband’s estate includes assets that are subject to probate and/or there are creditor claims that need to be settled, here’s what you’ll need to do:
1. Open probate – begin by submitting the will to the county court with a petition to open probate. In the petition, you’ll need to provide an estimate of the estate’s assets, a list of all the interested parties (beneficiaries, legal heirs, and known creditors).
You’ll also need to request to be appointed as the estate’s personal representative in order to receive the authority to manage the estate through probate.
2. Serve notice of probate – you’ll be asked to serve notice of probate to all of the estate’s interested parties, and to submit proof of service to the court. You’ll also need to publish a notice of probate in the local newspaper once a week for three weeks, to notify any unknown creditors or legal heirs that probate has begun.
3. Gather the assets – when the court provides you with Letters Testamentary (usually just referred to as Letters), you’ll have the authority to work with the decedent’s financial institutions to liquidate and transfer assets. Non-probate assets are free to transfer immediately, but probate assets cannot be distributed until all of the liabilities are settled.
4. Settle the liabilities – if your husband has any individual debts or bills, you’ll need to pay them using the estate’s assets. Any debts or bills that you share responsibility for won’t need to be settled at this time, as you’ll continue to make payments on them until you pass away, at which point your estate will be responsible for settling any remaining liabilities.
5. Distribute the assets – once the decedent’s individual liabilities have been settled, you’ll be free to distribute the estate’s remaining assets.
6. Close the estate – when all of the assets have been transferred, submit an accounting of your activities to the court along with a petition to close the estate.
As long as nobody contests the will or objects to the activities of the personal representative, probate is considered informal. Informal probate can largely take place without court supervision and will usually wrap up in 6 – 8 months. If there are will contests or objections by interested parties, formal probate can take up to a year or longer to sort out.
The Small Estate Exception
The state of Arizona offers an exception that allows smaller estates to transfer assets, settle creditor claims, and close the estate without going through probate. Estates with less than $75,000 in personal property and less than $100,000 in real estate qualify for the small estate exception. To process a small estate, all you need to do is fill out a small estate affidavit.
Do You Need Help with Probate Matters?
As you can see, AZ probate laws can be complex. It requires a number of steps and without the right approach, it’s easy to get lost in the details.
At JacksonWhite, we can make probate a clear, easy-to-understand process. If you’d like help with probate matters, call the talented team at JacksonWhite Law today.
We can help explain your legal options and direct you to the probate solution that works for you and your loved ones.
Call Probate Attorney Ryan Hodges at (480)467-4365 to discuss your case today.