How to Avoid Probate of Your Estate
Probate is the court process by which property is distributed upon your death, either by will or under state intestacy law. Since probate proceedings can be lengthy and costly for surviving family members, you may wish to take steps to avoid it. In Arizona, there are a few ways you can cause property and assets to be transferred to your beneficiaries without anyone going to court.
Any property you include in your last will and testament will be subject to probate. This can include bank accounts, retirement accounts, stock and bonds, real estate, vehicles, art, jewelry and other assets. If you die without a will, your property goes through an administrative process similar to probate unless you made alternative arrangements.
These are the most common legal mechanisms available in Arizona to avoid probate of some or all of your property:
- Creating a trust — A living trust is a vehicle for ensuring that property is managed and distributed according to your instructions. You can serve as trustee during your lifetime, retaining full control over the trust’s assets, and appoint a successor trustee to take over upon your passing. Unless the trust is challenged, the assets can be distributed by the successor trustee without the involvement of any court.
- Designating beneficiaries — You can add a payable-on-death (POD) designation to your bank account, brokerage account or 401k. A POD can allow you to maintain control over the account until your passing, at which time the beneficiaries you have selected will be able to access them.
- Titling the deed to real property — Your interest in real property that you co-own with another person can pass to that person without probate. For example, you can name one or more individuals as joint tenants with rights of survivorship. In addition, Arizona is a community property state. This means that a decedent’s share of real property will automatically pass to their surviving spouse and should not have to go through the probate process.
Bear in mind that probate in Arizona is relatively simple and inexpensive for small estates. If the amount of your real property is less than $100,000, or your personal property is valued at less than $75,000, your heirs may be able to use Arizona’s small estate proceedings rather than going through the formal probate process in court.
A comprehensive estate plan can include effective measures for avoiding probate of most or all of your assets while ensuring that your intended transfers are carried out. Pennington Law, PLLC assists individuals and families in all aspects of estate planning. With offices located in Surprise and Sun City West, we represent clients throughout the Phoenix metro area. Call 623-208-7867 or contact us online to schedule a consultation.