Probably not. The reason is that the legislature has passed a set of statutes called the "Laws of Intestate Succession" that control how your property passes at your death. It has been said that effectively, the legislature has written your will for you if you fail to write one yourself. According to the legislature, if you do not have children by a prior marriage, your present spouse, if you have one, is first in line to inherit all of your estate. If you have no spouse at the time you die, your children take your probate estate. If you have no spouse and no children, your parents would inherit. The statute becomes troublesome in the case of blended families. If you have children by a first marriage, they take all your separate property and your spouse takes all of your share of the community property. This runs counter to the desires of most people.
Another danger in relying upon the Laws of Intestate Succession as a substitute for a Will, is that these laws differ from state to state. If you should die a resident of another state, and you lack a Will, you may be unable to foresee who will receive your assets.
But back to the question, the State of Arizona becomes the taker of last resort of your assets, if there are no other takers under the Laws of Intestate Succession.
Arizona law permits you to disinherit your spouse, but not completely. Upon your death, your spouse will be entitled to a package of statutory allowances from your estate, worth $37,000, or more. This means that your spouse will receive the first $37,000 from your estate, even ahead of your creditors. You can enter into a prenuptial agreement or a post nuptial agreement with your spouse to waive this right. Such agreements are strictly regulated by law; each side should be represented by legal counsel, and such agreements must be fair.
If you leave them a dollar, your Personal Representative will have to find them and give them the dollar after you die. That might be more trouble than it is worth. The better way to disinherit someone in your will is to mention their name specifically and to state your intention that the person receive nothing of your estate.
No. As long as a Will follows the requirements for execution set forth in the Arizona Revised Statutes, it may be valid.
No. A Will is a set of instructions to the Court on how your property is to pass at death. If you own property that needs to pass to others at your death by probate, the Will is what a Court will rely upon to decide who is appointed your Personal Representative. In contested cases, the Court will rely on your Will to decide who is entitled to your probatable assets upon your death. Many assets avoid probate just with the way they are titled. Life insurance policies, for example, do not pass through the probate process if you have named beneficiaries. Other assets that are owned by your Trustee under a Living Trust are not probatable because you do not own them at your death, your Trustee does!
No. Let us use the example of husband and wife who own the house as joint tenants with right of survivorship. Upon the death of the first spouse to die, the title to the house can be changed to the sole name of the surviving spouse without a probate.
There are other examples of assets passing without probate. In Arizona, your Will beneficiaries (or your heirs if you do not have a Will) can collect your personal property (bank accounts, stocks, etc. ) up to $50,000, without filing probate. The same applies to real property where the equity is $50,000 or less according to the county tax assessment immediately prior to the date of death, however the collection of the property must wait at least six months after the date of death.
Not necessarily. Assets which pass by way of beneficiary designation are not controlled by the Will, if you have named a beneficiary. This applies to IRA's and other qualified retirement plans, life insurance policies and annuities. Bank accounts which pass to surviving joint holders are not probate assets and their passage is not controlled by your Will. Title to real estate held as joint tenants with right of survivorship passes outside the Will to the surviving joint tenant.
Most people who set up a Trust during their lifetime (hence the term "Living Trust") do so to avoid probate. The Trust succeeds in avoiding probate only if all otherwise probatable assets are retitled in the name of the Trustee of the Trust. Sometimes people establish a living Trust but don't get around to retitling all the assets into the Trust before they die. Sometimes they become incapacitated as the result of an accident and they then receive settlement proceeds which are probatable. So in order to put the Trustee in control of how assets move after death, one does a Will leaving all assets to the Trustee of the Living Trust. Such a Will is called a "Pour-Over Will" because it pours over into the Trust.
If you do that, make sure that the estate has enough money in it to be able to afford handwriting experts, lawyers and other expenses of litigation.
A Will that is entirely in the handwriting of the Testator is a Holographic Will. Arizona Courts will give effect to a Holographic Will. Just remember that a Holographic Will is subject to the same shortcomings as any other Will you might write on your own. See What are the top 5 reasons NOT to write your own Will?Otherwise, Arizona law requires two adult witnesses on a Will. Interestingly enough, the Witnesses can have been named in the Will as beneficiaries.
Not automatically. The Will needs to pass Arizona's test for validity.
Yes, there are several reasons. You may acquire assets you never expected to own. One example is when you have an accident and your family secures an accident recovery for you. Your Will would direct the passage of those settlement proceeds upon your death. A second reason to have a Will, even if you have few assets, is to name a guardian for your minor children. A third reason is to settle the question of who you want to be Personal Representative of your estate.
For some reason, a lot of people from Missouri do Joint Wills. Joint Wills are a bad idea. When the first spouse dies, the Will of both the parties is filed in Court. How do you probate it in the second estate?Even if you overcome that hurdle, the other problem with Joint Wills comes when the second spouse dies years later. Then families fight over whether the making of a Joint Will constituted the making of a contract between Husband and Wife that neither would be permitted to change his or her Will after the death of the first spouse to die.
Put it in a fireproof place. Your freezer is not such a place. If you choose to store it in a bank safe deposit box, your survivors will have access to it after your death with very little trouble. Word to the wise: Let your Personal Representative:
a) know that you nominated him to be your Personal Representative
b) be a signer on the safe deposit box
c) know where you hid the key to the safe deposit box
Bad idea. It is possible for your estate to get sued for libel for the bad things you say about others in your Will.
The root of the word is "provar" which in Latin means to prove. Probate historically included a process where a Court needed to ascertain whether the Will is really the will of the decedent. The Will needed to be "proved" to be authentic.
Probate has since taken on a wider meaning. It has become synonymous with estate administration after death. So the estate of a person dying without a will (dying "intestate") is administered in court, as well as the estate of a person dying with a will (dying "testate").
The normal way that we transfer ownership of property that comes with a title is to sign the title over to someone else. An example is signing the back of your car title to transfer it to a purchaser. After a person dies, signing their name becomes a little difficult (unless you are from Chicago where for years the people in the cemeteries voted). And so it becomes necessary for a Court to authorize another individual called a "Personal Representative" to sign transfers of titled property on behalf of the decedent.
So, for example, in the case of estate administration involving real estate, first the Court would appoint a "Personal Representative". Then the personal representative would obtain evidence from the Clerk of the Court of his having been appointed the Personal Representative. The evidence is called "Letters of Administration". Then the Personal Representative issues a deed of distribution of the land to whomever is designated to receive it under the Will. Both the deed and the Letters of Administration would be recorded in the office of the County Recorder to establish on the public record that the Personal Representative really had the power to sign the deed.
Many kinds. Here are some examples:
No. First look to see if the estate contains probatable property. If it all passes by joint tenancy designation or beneficiary designation, there is no need for probate.
Second, if there are probatable assets, look at the amount. If the real property located within the State of Arizona is worth $50,000 or less according to the assessor's statement current at the date of death, the real property can be collected by affidavit. If the personal property in the estate is worth $50,000 or less, it too can be collected by affidavit.
In the case of real property, you have to wait six months after the date of death. If you do not want to wait the six months, you can file a regular probate immediately. Once the six months elapses, you open a court case and ask the court's Probate Registrar for an order allowing you to record your affidavit with the County Recording, evidencing the transfer of ownership of the real property. Obviously, this only works in simple cases where the Probate Registrar is clear on who is supposed to inherit the property. The law requires that the affidavit contain a representation that the debts of the estate have been paid, after the statutory allowances for widow and family have been met.
Personal property, which includes things like tangible wage claims, personal property, automobiles, bank accounts, and even brokerage accounts. These are collectible by presenting an affidavit, provided the value of all such property does not exceed $50,000.
Henry VIII relied on probate to raise taxes to finance his armies. When land passed through probate, the estate paid a tax. Then the Church created the idea of a trust, which avoided probate and deprived the King of his tax revenues. Henry VIII went to Parliament and had them pass the "Rule Against Perpetuities" which effectively said that a trust can't go on forever, so that its contents can be probated and taxed.
Today, there exists little relationship between probate and estate taxes. If you own it, it is counted toward computing your estate tax obligation, whether or not it has to be under a court's estate administration in order for title to pass to others. However, the person who is appointed by the Court to be the Personal Representative of the estate is required to file the estate tax return, if one is required. Further, the Personal Representative can become personally liable for the estate taxes, if he distributes the assets of the estate to beneficiaries, failing to pay all or a portion of the tax bill to the taxing authorities.
Let us assume that the beneficiaries of the estate are not fighting. Let us assume further that everybody knows what are the assets of the estate, where they are, and that the taxes on the estate, if any, are easy to compute. That estate will likely settle in six months. But more important, the Personal Representative, once appointed in Arizona, has immediate authority, in ordinary circumstances, to transfer some or all of the assets to the estate beneficiaries.
Distilled down to the basics:
He is entitled by law to "reasonable" compensation. This is usually on an hourly basis, so it is essential to keep a log of the dates of service, the description of the service, and the amount of time expended.
The probate court has to be satisfied that the lawyer's fee was reasonable in each case. There is no statute, like other states have, providing that an attorney gets a percentage of the estate. As a practical matter, Arizona is a Sunbelt state. Lawyers love to practice here, which means that there is a lot of competition. Therefore, you should be able to find a lawyer who is willing to probate a non-contested estate on a flat fee basis.
A trust is a set of instructions to a Trustee contained in a legally enforceable document. The instructions deal with the following issues:
Do not do a trust because you are afraid of a probate. Probate is a relatively simple and painless procedure in Arizona. Do a trust because you are afraid of two probates. It becomes cost effective to do a living trust in lieu of two probates. In cases where there is out of state land, and land in Arizona, the decedent will face multiple probates.
Do a trust if you are leaving assets to a beneficiary who will blow them if he receives them outright.
Do a trust if you believe that a Trustee should stand in between your intended beneficiary and people who would charm or defraud that beneficiary out of his trust money.
Do a trust if you want to give a beneficiary income for life, with a remainder interest in a different beneficiary.
Do a trust if you want to plan effectively for the possibility of your own disability and you desire the accountability and the efficiency of a Trustee.
Do a trust if you are married and need to minimize estate taxes. There are two types of trusts that are particularly helpful in this regard. The first is called a "Credit Shelter Trust" or an "A-B-Trust" The second is called a Q-Tip Trust.
Most people who set up a Trust during their lifetime (hence the term "Living Trust") do so to avoid probate. The Trust succeeds in avoiding probate only if all otherwise probatable assets are retitled in the name of the Trustee of the Trust. Sometimes people establish a living Trust but don't get around to retitling all the assets into the Trust before they die. Sometimes they become incapacitated as the result of an accident and they then receive settlement proceeds which are probatable. So in order to put the Trustee in control of how assets move after death, one does a Will leaving all assets to the Trustee of the Living Trust. Such a Will is called a "Pour-Over Will" because it pours over into the Trust.
Corporate trustees rarely operate under a bond. If you are selecting an individual trust, you may afford the trust beneficiaries an added degree of protection by requiring that the trustee purchase a surety bond. They are readily available, but seldom used.
A person who sets up a trust is called either a Grantor, or a Settler or a Trustor. Let's use the term Grantor. In a revocable trust, the Grantor retains the right to revoke or amend the trust. The Grantor does not part with the incidents of ownership of the property that he has put into the trust. He is considered the "equitable owner" of the trust assets, despite the fact that the Trustee is considered the legal owner of the assets. For tax purposes, a person who has established a revocable trust has not given away the ownership of the property in the trust to anyone else.
In an irrevocable trust, the Grantor cannot revoke. The Grantor has parted with the incidents of ownership of the assets of the trust. He has no right to have the assets returned to his individual ownership. He is not considered the "equitable owner" of the assets. For tax purposes, a person who has established an irrevocable trust has given away the ownership of the property, unless other factors are present.
A simple, garden variety revocable living trust does not make the assets contained in the trust any less vulnerable to the cost of long term care.
Making a gift to an irrevocable trust which returns income to the Grantor may put the assets out of reach for ALTCS/Medicaid eligibility purposes, however, the making of the gift will result in certain eligibility penalties. Can a trust be a valuable Medicaid planning tool?
In the case of a married couple with liquid assets less than $160,000 and a house, a revocable living trust can dramatically increase the amount that the community spouse can retain as the nursing home spouse qualifies for ALTCS. A qualified Medicaid planning attorney has to explain how this favorable outcome is obtained.
An irrevocable trust which is designed to return all its income to the people making the trust can result in assets passing free of an ALTCS estate recovery claim. Such a trust can also preserve some important tax benefits for the transferees of the property.
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