When someone passes away, all of their assets will need to legally transfer to their beneficiaries and legal heirs. Most assets can easily transfer to beneficiaries outside of probate, but transferring real estate can be tricky. The process of transferring the deed of a house will hinge on how the house is titled. The first step is usually to procure a copy of the deed from the county recorder’s office to determine how the property is titled.
Joint Tenancy and Tenancy by Entirety
If the decedent owned the house in joint tenancy or tenancy by entirety (ARS 33-431), it’s pretty easy to transfer the title of ownership. The joint owner(s) or the owner’s spouse will need to submit a copy of the owner’s death certificate county recorder’s office. If there are more than two living owners, you may need to submit an affidavit to attest that you own the property. Once the county recorder has the proper paperwork, they will issue a new deed with the decedent’s name removed.
Individual Ownership or Tenancy in Common
If the decedent owned the house individually, or if they owned the house as a tenant in common with other owners, the house can only transfer title of ownership through probate. If that’s the case, here’s how to transfer ownership of the house through probate court:
- Submit a copy of the decedent’s will (if applicable)
- Petition to open probate and appoint a personal representative
- Inventory and value the estate’s assets
- Settle the estate’s liabilities
- Receive a court order to transfer “clear title”
Submit the Will
If the decedent left a will, the party in possession of the will needs to submit the document to the county court within 30 – 120 days. Once the court has the will, they will validate the document and authenticate the will. If the decedent didn’t leave a will, the estate’s legal heirs will be determined by the state’s intestacy laws.
Open Probate and Appoint a Personal Representative
Probate doesn’t automatically start on its own—someone (usually a family member) will need to submit a petition to the county court to open probate for the estate. If the decedent left a will, the will should nominate someone to serve as their executor or personal representative. In the absence of a will, the court can appoint a qualified family member or associate to serve as the personal representative. If there is too much discord amongst the family to come to a consensus on who should be the personal representative, the judge can appoint a third-party special administrator.
Inventory and Value the Estate’s Assets
The personal representative’s first order of business will be to gather all of the decedent’s assets and value their estate. Bank and brokerage accounts are easy to verify with the most recent account statement, but illiquid assets like a house will need to be professionally appraised. Other assets that may require an appraisal for fair market value include vehicles, art, jewelry, and collectibles.
Settle the Estate’s Liabilities
Before the personal representative can distribute any assets, he or she will need to settle all of the decedent’s outstanding bills, debts, and final taxes. Once probate has been opened, creditors usually have four months to file a claim against the estate.
Liabilities take precedence over willed-beneficiaries and legal heirs, so the personal representative may be required to liquidate assets (including the house) if necessary to settle the liabilities. If there are more liabilities than assets, the estate is considered insolvent and the beneficiaries/heirs unfortunately won’t not receive any assets through probate.
Receive a Court Order to Transfer “Clear Title”
Once the liabilities are settled, the personal representative will be free to distribute the decedent’s assets. When the personal representative files a final accounting and report of their activities, the court will order a transfer of “clear title” and close the estate. With the court order in hand, the county recorder’s office will issue a new deed in the beneficiary/heir’s name.
The Small Estate Exception
In the state of Arizona, estates with less than $75,000 in personal property and less than $100,000 in real property are eligible to transfer property without going through probate court. If there is a house or other property involved, you’ll need to wait at least 6 months before filing a small estate affidavit. Assuming the court accepts the affidavit, the court will skip the entire probate process and issue an order to transfer “clear title” that you can take to the county recorder’s office for a new deed.
What Happens to a Decedent’s House When There Isn’t a Will
When someone dies without a will, they die “intestate,” and their assets will be distributed to their legal heirs according to the state’s intestacy laws. Intestacy laws are designed to fairly award assets to legal heirs, but they don’t allow the decedent’s family to have any say in who receives which assets. In the state of Arizona, intestate succession is determined in the following order:
- If the decedent was married and did not have children with another partner, their entire estate will transfer to their spouse (ARS 14-2102)
- If the decedent was married and had children with another partner, the spouse would receive 50% of the estate, and the children from the separate relationship(s) would split the remaining 50% of the estate
- If the decedent was not married, their estate would go to their children by representation (ARS 14-2103)
- If the decedent was not married and didn’t have children, their estate would go to their surviving parent(s)
- If the decedent was not married, didn’t have children, and doesn’t have surviving parents, the estate would pass to their siblings by representation
- If the decedent was not married, didn’t have children, and doesn’t have surviving parents, siblings, nieces, or nephews, the decedent’s extended family can claim the estate (grandparents, aunts, uncles, cousins, etc.)
- In rare cases where the decedent doesn’t have any family members, or if nobody comes forward to claim the estate, the state has the right to seize the decedent’s assets (ARS 14-2105)
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 our Probate team at (480)467-4365 to discuss your case today.