When a loved one passes away, most people know and believe that probate is one of the next steps. But what exactly is probate? Is it necessary in your situation? What should you be doing, if anything, to prepare?
When a person passes away, there are two types of Estates- a Testate Estate or an Intestate Estate. A Testate Estate is when the person who passed left a Last Will & Testament to guide how they would like their Estate to be distributed. An Intestate Estate is when no Will was left and an Estate will be distributed according to the laws of the state. All of those laws can be found under Title 14 of the Arizona Revised Statutes. Probate can happen with either type of Estate.
Probate is the process by which a court becomes involved in the distribution of an Estate. This can happen because someone challenges a Will, or because the recently deceased person owned a house that now needs court authority to be sold, or because no beneficiary was named on a Life Insurance policy, or for many other reasons. Unfortunately, simply creating a Will does not prevent Probate, but meeting with an attorney can help a person strategize on probate-avoidance techniques. For example, creating a Living Trust (and funding it correctly!), putting beneficiaries on bank accounts or insurance policies, or recording a Beneficiary Deed for a home are all things that can help a person’s loved ones avoid probate.
If a loved one passes away, and you are not sure whether probate is necessary, take a deep breath and try to relax. Nothing needs to be done immediately; in fact, some types of court intervention require waiting periods. Your first steps should be to grieve for your loved one and to start going through their important documents. You should look for things such as the following items: a Last Will & Testament, a Living Trust, bank accounts, insurance policies, titles to homes or cars or other properties, mortgage and other lien documents, stocks and bonds, any legal entanglements (businesses, law suits, etc.), and you should start creating an inventory of their personal property (jewelry, household items, art, etc.). Gathering this information will allow you to begin to realize if probate will be necessary or not.
Any items that automatically transition to someone else without court authority will not require probate. This is often done through probate-avoidance techniques. For example, if a husband and wife have a joint bank account, and the husband passes away, then the wife will automatically still be an owner on the account and have full access to everything in it. That money then belongs outright to her and does not need to go through probate. Another example is if a couple owns their home outright, creates a Beneficiary Deed for the home to go to their eldest child (an adult), and then the couple passes away in a car crash. Once the eldest child records their death certificates, the home is that child’s outright, without any need for court intervention. Let’s say an elderly woman has named her brother as the sole beneficiary on her life insurance; when she passes away, he will provide her death certificate and fill out some other paperwork, but then the money will go to him outright, without the need for probate.
However, if a couple passes away with a home in their names, two cars in their names, bank accounts in their names, and no other beneficiaries listed, then probate will be required. Probate will help establish the validity of the Will and the right of the Personal Representative to do things for and in the name of the Estate. Probate requires Notice to all beneficiaries as well as Notice to possible creditors of the Estate. The court will give authority to the Personal Representative so that they can change bank accounts, change home titles, and gather and distribute all the property in the Estate for the benefit of the beneficiaries. If minors are involved as beneficiaries, the Personal Representative may need to set up a Trust or work with an existing Trustee to provide the share legally to the minor. Probate can get quite complicated and we suggest you meet with an attorney to discuss how to proceed or whether it is even necessary.
If you have questions on probate and whether it is necessary after a loved one’s passing, please contact The Carroll Law Firm at 623-551-9366!
