Avoid Probate Without a Trust
Many of our clients come to us asking to set up trusts in order to avoid probate. While trusts are appropriate in many circumstances, did you know that there are many affordable ways to avoid probate without having to set up a complex trust?
A will governs assets that are part of one’s probate estate. In Arizona, however, assets with named beneficiaries can pass outside of probate. Below are some common mechanisms to avoid probate.
(1) Life Insurance: You can appoint a beneficiary and alternate beneficiary on life insurance in order to ensure the asset passes without going through probate. Arizona law prevents creditors from going after life insurance proceeds when the decedent has named a beneficiary (other than his or her own estate) of the policy.
(2) Beneficiary Deed(s) and Property held With Right of Survivorship: Jointly held properties with right of survivorship will pass to the surviving party automatically upon death. For real property not held jointly, parties can draft a beneficiary deed and file it with the County Recorder. This mechanism allows the property to pass automatically to appointed beneficiaries named within the deed upon the death of the owner.
(3) Joint Accounts or Payable on Death Beneficiaries: Bank accounts held jointly with right of survivorship will pass automatically to the joint owner without probate. If one’s accounts are not jointly owned, then the owner can appoint a payable on death beneficiary or beneficiaries to allow the asset to pass automatically upon death without passing through probate.
(4) IRA’s/Retirement/Investment Accounts: Be sure to appoint a primary beneficiary and alternate beneficiaries for your IRA.
(5) Vehicles: In Arizona, the MVD provides a mechanism to allow cars to pass to beneficiaries without going through probate. The form can be found here:
http://www.azdot.gov/docs/mvd-forms-pubs/96-0561.pdf?sfvrsn=0
Of course, no matter how much planning one does, there may be assets that cannot transfer outside of probate. (For example, pending lawsuits/settlements, certain highly valued personal property, wrongful death claims, etc.) For these circumstances (and other reasons) we recommend everyone have a will. Our goal, however, is to avoid probate when possible by explaining inexpensive solutions for allow assets to pass automatically to loved ones.
We offer free consultations for estate planning. At the consultation our attorneys will sit down with you, discuss your assets, and suggest appropriate estate planning documents to protect you and your loved ones. The Carroll Law Firm conveniently has offices in Anthem, Arizona, and Surprise,Arizona. Call us today at (623)551-9366 to set up your free estate planning consultation.
