{"id":298,"date":"2019-03-22T08:40:55","date_gmt":"2019-03-22T15:40:55","guid":{"rendered":"https:\/\/www.jacksonwhitelaw.com\/probate\/?p=298"},"modified":"2022-11-15T13:58:20","modified_gmt":"2022-11-15T20:58:20","slug":"assets-that-must-go-through-probate","status":"publish","type":"post","link":"https:\/\/www.jacksonwhitelaw.com\/probate\/blog\/assets-that-must-go-through-probate\/","title":{"rendered":"What Assets Must Go Through Probate?"},"content":{"rendered":"<h2>Introduction<\/h2>\n<p><a href=\"http:\/\/www.uniformlaws.org\/shared\/docs\/probate%20code\/upc%202010.pdf\">Probate<\/a> is the legal process through which a decedent\u2019s will is validated, liabilities are settled, assets are distributed to beneficiaries, and the estate is formally closed. While probate is undeniably important, it can be time consuming and costly. Fortunately, only a handful of assets are subject to probate. With proper estate planning, most (if not all) assets can be positioned to transfer to beneficiaries outside of probate.<\/p>\n<h4>Probate Assets<\/h4>\n<p>Generally speaking, assets that are titled individually in the decedent\u2019s name and don\u2019t have a designated beneficiary will need to be probated. Common probate assets include:<\/p>\n<ul>\n<li>Individual bank and brokerage accounts<\/li>\n<li>Individually-owned real estate<\/li>\n<li>Individually-owned vehicles (cars, trucks, motorcycles, recreational vehicles, boats, etc.)<\/li>\n<li>Personal property (jewelry, art, collectibles, guns, etc.)<\/li>\n<\/ul>\n<p>In addition to individually-owned assets, real estate that\u2019s titled as tenants-in-common (TIC) with the decedent will need to go through probate. Unlike real estate that\u2019s owned as joint tenants, the decedent\u2019s ownership share of TIC property will to pass to his or her beneficiaries, not to the surviving joint property owners.<\/p>\n<h4>Non-Probate Assets<\/h4>\n<p>Non-probate assets are able to bypass probate because they\u2019re either jointly-owned (with the exception of TIC property) or they have a designated beneficiary listed on the account, title, or deed. Some of the most common non-probate assets include:<\/p>\n<ul>\n<li>Bank accounts with a payable-on-death (POD) beneficiary<\/li>\n<li>Brokerage accounts with a transfer-on-death (TOD) beneficiary<\/li>\n<li>Life insurance death benefits<\/li>\n<li>Living trusts<\/li>\n<li>Pension plan distributions<\/li>\n<li>Real estate held as tenants by the entirety (exclusively for spouses)<\/li>\n<li>Real estate held in joint tenancy with right of survivorship<\/li>\n<li>Retirement accounts (IRA, 401k, etc.)<\/li>\n<li>Salary, wages, and commissions due to the decedent<\/li>\n<li>Savings bonds with a co-owner or POD beneficiary<\/li>\n<\/ul>\n<p>Most non-probate assets are designed to automatically transfer to the joint owner or designated beneficiary upon the decedent\u2019s passing. To initiate the transfer, the beneficiary or the estate\u2019s executor will usually need to submit a copy of the decedent\u2019s death certificate to the financial institution that\u2019s holding the assets or title.<\/p>\n<p>Note that non-probate assets also aren\u2019t liable to creditors\u2019 claims against the decedent\u2019s estate. The surviving spouse may inherit some of the decedent\u2019s debts and liabilities, but third-party beneficiaries who receive gifted assets won\u2019t inherit any liability. Even if the estate is considered insolvent and there aren\u2019t enough probate assets to cover the liabilities, third-party beneficiaries should still receive all of the non-probate assets for which they\u2019re listed as a designated beneficiary.<\/p>\n<h4>The Probate Process<\/h4>\n<p>When an estate includes assets that are subject to probate, those assets won\u2019t be able to transfer title of ownership without a court order. Before that can happen, there are a few important steps that need to take place. If you\u2019re an interested party to the estate, here\u2019s what to expect in the probate process:<\/p>\n<ol>\n<li>Petition for probate \u2013 assuming that the decedent left a will, the individual nominated in the will to serve as the estate\u2019s executor is usually the one to petition for probate. If there isn\u2019t a will, or if the executor has failed to open probate in a reasonable amount of time, any interested party to the estate can petition to open probate.<\/li>\n<li>Validate the will \u2013 the court will check the will to ensure the document is properly drafted and signed. If there are any issues, the court may invalidate part or all of the will, in which case probate would proceed as if the decedent didn\u2019t leave a will.<\/li>\n<li>Appoint the executor \u2013 barring any objections from interested parties, the court should automatically appoint the nominated executor and provide him or her with the necessary Letters Testamentary (aka Letters). The executor will need these Letters to deal with the estate\u2019s creditors and financial institutions, as they convey the court authority for the executor to legally act on behalf of the estate. If there isn\u2019t a will, an interested party can petition the court to be appointed the estate\u2019s <a href=\"https:\/\/www.azleg.gov\/ars\/14\/01201.htm\" target=\"_blank\" rel=\"noopener noreferrer\">personal representative<\/a>. In rare cases where there isn\u2019t a qualified candidate to be personal representative, or if there is too much discord amongst the surviving family members to agree on who should be the personal representative, then the court can appoint a neutral third-party <a href=\"https:\/\/www.azleg.gov\/ars\/14\/03614.htm\" target=\"_blank\" rel=\"noopener noreferrer\">special administrator<\/a>.<\/li>\n<li>Notify all interested parties \u2013 the state of Arizona requires the executor or personal representative to provide notice to all of the estate\u2019s interested parties (creditors, beneficiaries, and legal heirs), and to publish an ad in the local newspaper to notify any unknown interested parties of the probate proceedings. Once the ad is placed in the local newspaper, the estate\u2019s creditors will have 120 days to file a claim against the estate.<\/li>\n<li>Gather the assets \u2013 while the executor waits for all of the creditor claims to come in, he or she will usually open an estate checking account and begin to liquidate and consolidate the probate assets. Illiquid assets like real estate, vehicles, art, jewelry, and collectibles will likely need to be professionally appraised to determine the fair market value.<\/li>\n<li>Initiate non-probate transfers \u2013 since non-probate assets aren\u2019t subject to creditor claims, the executor is free to initiate non-probate transfers at any time.<\/li>\n<li>Settle the estate\u2019s liabilities \u2013 when the estate\u2019s creditors have been allowed enough time to submit their claims, the executor will begin by paying the decedent\u2019s funeral expenses and the estate\u2019s legal fees (court costs, lawyer fees, etc.). Next, the executor will pay the estate\u2019s creditors. When the debts are settled, the executor will then file a final tax return and pay any required income taxes or estate taxes. Finally, the executor will settle any outstanding bills.<\/li>\n<li>Distribute the residual assets \u2013 once all of the estate\u2019s liabilities are settled, the executor can receive permission from the court to distribute the remaining probate assets to the beneficiaries. If there aren\u2019t any remaining assets (i.e. the estate is insolvent), then the beneficiaries won\u2019t receive any probate assets.<\/li>\n<li>Close the estate \u2013 after all of the residual assets are distributed, the court will officially close the estate. It\u2019s important not to forget this crucial step, as closing the estate shuts the door on future creditor claims. If an estate isn\u2019t closed, creditors may have up to two years to file a valid claim against the estate.<\/li>\n<\/ol>\n<h4>The Small Estate Exemption<\/h4>\n<p>The state of Arizona has a provision that allows small estates to transfer probate assets without going through the probate process. To qualify, the estate will need to have less than $75,000 in personal property, and less than $100,000 in real estate. The court may require you to wait at least six months to file a <a href=\"https:\/\/www.superiorcourt.maricopa.gov\/sscDocs\/packets\/pbse1z.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">small estate affidavit<\/a>, but the process is still significantly easier than going through the full probate process.<\/p>\n<h4>Do You Need Help with Probate Matters?<\/h4>\n<p>As you can see, <a href=\"\/probate\/\">AZ probate laws<\/a> can be complex. It requires a number of steps and without the right approach, it\u2019s easy to get lost in the details.<\/p>\n<p>At JacksonWhite, we can make probate a clear, easy-to-understand process. If you\u2019d like help with probate matters, call the talented team at JacksonWhite Law today.<\/p>\n<p>We can help explain your legal options and direct you to the probate solution that works for you and your loved ones.<\/p>\n<p style=\"text-align: left;\">Call our Probate team at <a href=\"tel:4804674365\">(480)467-4365<\/a> to discuss your case today.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction Probate is the legal process through which a decedent\u2019s will is validated, liabilities are settled, assets are distributed to beneficiaries, and the estate is formally closed. While probate is undeniably important, it can be time consuming and costly. Fortunately, only a handful of assets are subject to probate. With proper estate planning, most (if [&hellip;]<\/p>\n","protected":false},"author":21,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[28],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - 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