Probate<\/a> is the legal process of executing a decedent\u2019s will, settling their liabilities, distributing their individually-titled assets, and closing their estate. Probate can be a long and costly process, but the good news is that probate isn\u2019t always necessary. Assets that have a designated beneficiary can transfer ownership automatically outside of probate, and estates with no valuable assets don\u2019t need to go through probate if there\u2019s no property to transfer.<\/p>\n Assuming probate is necessary, there can be a number of consequences for not petitioning to open probate:<\/p>\n While assets with a designated beneficiary can seamlessly transfer ownership outside of probate, assets that are titled solely in the decedent\u2019s name require a court order to transfer the title. Absent a court order, these assets will remain frozen in the decedent\u2019s name until the assets are eventually foreclosed, repossessed, or seized. Even if a rightful heir takes possession of the assets (e.g. moves into the house, takes the car), the heir wouldn\u2019t legally own the assets.<\/p>\n When an estate\u2019s assets are left to languish, losses are almost inevitable. Houses and property that aren\u2019t properly cared for can become blighted and lose market value, and if nobody pays the mortgage the bank may repossess the property. Unoccupied houses are frequently targeted by burglars, as are unattended vehicles left in the driveway.<\/p>\n Vehicles that are left on the street for too long may be ticketed and towed, and the bank will repossess vehicles that are behind on monthly payments. Stocks, bonds, and mutual funds are susceptible to market swings, and bear markets can slash an account\u2019s market value by over 20%. All of these scenarios result in fewer assets available to the beneficiaries, and if the court determines they are the result of gross negligence, the party in possession of the will may be held liable.<\/p>\n Any interested party to an estate has the right to petition to open probate. If the decedent left a will, that includes the beneficiaries; if the decedent died intestate<\/a> (without a will), then the estate\u2019s legal heirs can open probate. Even non-family members can open probate if they\u2019re listed as beneficiaries in the will, or if they have intertwined business interests.<\/p>\n Creditors have two years to file a valid claim against a decedent\u2019s estate if probate hasn\u2019t been opened. If the estate\u2019s beneficiaries and heirs fail to take action, the decedent\u2019s creditors can file a petition to start the estate settlement proceedings. Creditors will normally file a petition for administration and serve notice of the probate hearing to the decedent\u2019s heirs, usually in the hope that a family member will either come forward with the will or take on the responsibility of being the estate\u2019s personal representative<\/a>. If no family members are available or willing to take action, the court can appoint a third-party special administrator<\/a> to close the estate.<\/p>\n Although it\u2019s rare, the state has the right to seize unclaimed assets that are not covered in a will and that are not claimed by the decedent\u2019s lawful heirs (ARS 14-2105<\/a>). The state will need to make a reasonable effort to notify and repeatedly reach out to the decedent\u2019s heirs, but if nobody comes forward to claim the assets, the state is under no obligation to hunt down heirs and force them to respond.<\/p>\n When someone writes a will they usually leave the primary copy with their executor (the person they\u2019ve chosen to be their personal representative when they die). The party in possession of the will is required to submit the will to the county probate court within a reasonable amount of time following the decedent\u2019s passing (usually within 30 days, but up to 120 days in some states). If the executor fails to submit the will, they may be liable to the following action:<\/p>\n If you\u2019re debating whether probate is necessary for a loved one\u2019s estate, keep in mind small estates are exempt from probate in Arizona. As long as the estate has less than $75,000 in personal property and less than $100,000 in real property, the estate can pass to the decedent\u2019s beneficiaries or heirs with a simple affidavit<\/a>. If real estate isn\u2019t involved the beneficiaries need only wait 30 days to file a small estate affidavit, but if a house or property is involved the beneficiaries will need to wait at least six months to allow interested parties to submit claims on the estate.<\/p>\n Assets that have a designated beneficiary listed on the account can transfer to the beneficiary as soon as the financial institution holding the assets receives a copy of the decedent\u2019s death certificate. The following assets typically allow the owner to list a designated beneficiary:<\/p>\n\n
Individually-Titled Assets Will Remain Frozen in the Decedent\u2019s Name<\/h4>\n
The Estate\u2019s Assets are Subject to Losses<\/h4>\n
Another Interested Party May Petition to Open Probate<\/h4>\n
The Decedent\u2019s Creditors May Take Action<\/h4>\n
The State Can Seize Unclaimed Assets<\/h4>\n
The Party in Possession of the Will May be Held Personally Liable<\/h4>\n
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The Small Estate Exception<\/h4>\n
Which Assets are Able to Transfer Ownership Without Probate?<\/h4>\n