The loss of a loved one often leaves their family with many questions regarding the deceased’s possessions. The administration of an estate in Arizona is governed by state statutes and failure to adhere to those statutes can leave the administrator liable. Arizona statutes provide several avenues for administering an estate of a loved one, and the court system provides a wealth of the probate forms for use by the general public at no charge. However, no two estates are identical, and the tools for properly administering an estate in Arizona vary in complexity. The vast bank of forms on the court website can leave one with more questions than answers. Where do I start? What forms apply to this situation? What happens if I use the wrong form?
Types of Probate in Arizona
The cost of administering an estate in Arizona does not always correlate to its value. An estate may avoid court-involvement and its associated costs altogether if the decedent placed all their assets into a trust or if, among other requirements, the value of the estate is low enough that it qualifies as a “small estate”. These so-called small estates may be administered using the quickest and cheapest tool in the probate tool chest: the Small Estate Affidavits of Transfer, reserved for estates with $100,000.00 or less in equity in real property or $75,000.00 or less in personal property. There is also a waiting period of six months and thirty days, respectively, from the time of death before the person entitled to the property may move forward with one of these affidavits. If the value of the estate exceeds the “small estate” value, the next option is an Informal Probate. This is the general-purpose tool of the probate tool chest and still required even if the decedent executed a last will and testament. Informal Probate requires minimal court involvement and no hearing before a judge or commissioner. The most expensive and time-consuming tool is the Formal Probate, which can involve significant expense and time to complete. This tool is necessary whenever there is an issue with the estate that requires involvement by a judge or commissioner. This is the most time-consuming, and therefore costly, tool, including at least one hearing with a judge or commissioner.
Small Estate Affidavits
Small Estate Affidavits of Transfer require little-to-no court involvement and are appropriate for transferring the assets or final wages of a decedent to the heirs. Arizona provides two types of these affidavits depending on the type of assets in the estate. The Affidavit for Collection of Personal Property is appropriate if the value of personal property owned by the decedent minus liens and encumbrances is $75,000.00 or less. Arizona statutes allow for transfer of real property via an Affidavit for Succession to Real Property if the value of real property owned by the decedent minus liens and encumbrances (the equity) is $100,000.00 or less.
Having addressed the “when can these be used?” question, Arizona statutes also answer the question “who can use these?”. Either one of these affidavits can be signed by a person entitled to the asset according to the Will (if a will exists) or the person entitled to property under Arizona intestate succession statutes in order of priority. If the decedent had a spouse and children with that spouse, the surviving spouse would have priority. If the spouse assigns or waives his or her right to the assets, then the children would be next in line, and so forth.
The Affidavit for Collection of Personal Property does not involve the court at all; the person entitled to the property may complete and sign the affidavit and present it to the entity holding the property (decedent’s employer for wages, financial institution for bank account, Department of Motor Vehicles, etc.) and receive the personal property. The Affidavit for Succession to Real Property is filed with the Superior Court in the county where the real property exists, and a certified copy of the approved Affidavit is then recorded with the County Recorder to transfer the real property to the signer of the affidavit. While this affidavit is filed with the Court, it is not reviewed by a judicial officer nor is a hearing required. In Maricopa County, the probate registrar is the gatekeeper for these affidavits.
Who Can Initiate Informal Probate in Arizona
If the estate involves personal property with more than $75,000.00 in equity and/or real property with more than $100,000.00 in equity, informal probate is the best option, if possible. This tool can be utilized whether or not the Decedent had a will. The proper person entitled to appointment must be the one to initiate an informal probate. This means you are named as the personal representative in the will, or, if the Decedent had no will, you are first in line to serve as personal representative according to statute. Alternatively, a person entitled to appointment as personal representative can nominate you to serve instead, even if you are lower in the order of priority. An individual with an equal or superior right to appointment may also waive that right to serve as personal representative, and the responsibility then passes to the next individual with authority. This chain of authority matches the intestate succession line. Generally speaking, the decedent’s spouse (if any) is first in line, but if they pre-decease or waive their right, it passes to adult children, then grandchildren, and so on. However, in order to be appointed informally outside this order, all parties with a higher priority than you must sign a waiver.
Informal Appointment of Personal Representative
An informal probate requires minimal court involvement. The petitioner requesting appointment as personal representative submits their application along with supporting documents to the Superior Court for review. In Maricopa County, the probate registrar is the gatekeeper for these matters as well, but it can vary from county to county. The appropriate authority will either approve the appointment or deny it if the situation is not appropriate for an informal probate, or if additional/revised documentation is necessary. If approved, the newly appointed personal representative must comply with the notice requirements for interested parties and creditors, settle accounts with timely creditors, and provide the required accounting to the beneficiaries before closing out the probate. Our knowledgeable attorneys work with the personal representative to ensure that proper notice is provided. Improper notice can lead to expensive litigation with either interested parties or creditors.
Formal probate proceedings often get off to a tricky start, but once a personal representative is appointed by the Court, they proceed in identical fashion with the informal probate. A formal probate is required when there is an issue with the estate. These issues arise out a variety of situations, but the following are the most common:
- The original will was lost but the petitioner has a photocopy;
- A party with equal or superior right to appointment refuses to waive their right to appointment;
- An interested party received the Notice of Informal Appointment along with a copy of the will and wishes to contest the will.
The formal probate requires a hearing with a judicial officer of the Superior Court to review the Petition and to offer an opportunity for any other party to object. The Petitioner is responsible for requesting this initial hearing and complying with the notice requirements laid out in Arizona statutes. If no party objects at or prior to the initial hearing, then the Court will rule on the Petition.
If the Court approves the Petition, the personal representative is appointed and the matter proceeds like an informal probate with no further court involvement. If a party contests the Petition and submits an objection either prior to the hearing or at the hearing itself, the Court will order that the parties submit a Joint Report and Scheduling Order, and the parties will begin litigating the matter. A formal probate culminates in an evidentiary hearing on the Petition following which the appointed personal representative may begin administering the estate. The parties may arrive at a settlement at any time. Once the settlement is approved by the Court, the matter may proceed like an informal probate with no further court involvement unless requested.
How Can We Help?
The passing of a loved one leaves many questions, especially if the deceased left no estate plan. The probate process can be complex and innocent missteps can lead to expensive litigation. The best policy is a proactive approach. A probate attorney is an invaluable resource for determining which estate administration tool is appropriate for your situation and helping you avoid those costly missteps. In this way, our probate attorneys can help save a significant amount of time, money, and heartache. Our office will work with you to handle the legal side of the probate, allowing you the freedom and space to work through the grief without the added stress of ensuring that their estate is administered properly.