Which Assets Are Included In Arizona Probate?
It’s natural to have questions if you’re engaged in estate planning in Arizona. Knowing which of your assets will be subject to the probate process and which can pass directly to your loved ones after your death can help you make end-of-life decisions, but the laws are not always easy to understand.
Don’t worry. The estate planning attorneys at Brown & Hobkirk, PLLC can help. We’ll break down the complexities of Arizona probate law into simple terms so that you can make informed decisions about what happens to your estate after you pass. Call or contact us today for a free consultation about the best ways to protect your estate and family.
Types of Assets That Are Subject to Probate
Most assets and types of property that people own are subject to the probate process in Arizona. Examples include:
- Real estate, vehicles, and other titled assets owned solely by a decedent or assets owned by the decedent with other individuals as tenants in common.
- Personal possessions, including artwork, jewelry, clothing, collectibles, and furniture
- Financial assets, including bank accounts, brokerage accounts, business ownership interests, and other securities
- Half of the ownership interests in assets owned as community property (e.g., any property acquired during marriage), unless these assets are jointly owned by the decedent and their spouse with right of survivorship
Are Household Items Affected by Probate Laws?
Under Arizona probate law, any personal or household items owned by the decedent upon their death must go through the probate process. This can include everything from clothing and jewelry to electronics and small appliances. For this reason, it might be more effective for people to bequeath certain household items of significant or sentimental value to specific individuals during the estate planning process.
How Much Does an Estate Have to Be Worth to Go Through Probate?
Probate is required by Arizona law unless all of a decedent’s assets are placed in trust or the decedent has listed beneficiaries for all their assets. However, Arizona has a more straightforward, streamlined probate process for smaller estates. An estate can qualify for this process if the total value of the estate’s real property is less than $100,000, and all other non-real property totals less than $75,000.
Which Assets Are Not Considered Probate Assets?
Some types of assets do not have to go through probate under Arizona law, including:
- Assets transferred to a living trust: Such assets are owned by the trust at the time of a decedent’s death and therefore are not considered part of the decedent’s estate.
- Income earned by the decedent before their death: Wages or salaries and commissions are not subject to probate, although this income must be declared on the decedent’s final income tax returns.
- Accrued pension plan distributions: These are also not considered part of the decedent’s estate.
Jointly Owned Assets
Jointly owned assets may be a way for people to prevent their assets from going through probate following their death. Examples of joint ownership arrangements that avoid probate under Arizona law include community property where the spouses have elected a right of survivorship and assets held in a joint tenancy with a right of survivorship.
Beneficiary designations also allow individuals to ensure that certain accounts and assets avoid the probate process. When assets allow for a beneficiary designation, the assets are paid to, or ownership is transferred to, the designated beneficiary or beneficiaries.
For example, life insurance policies can have beneficiary designations, allowing the policy to be paid directly to a named beneficiary. Retirement accounts, such as IRAs and 401(k)s, also commonly allow for beneficiary designations.
Finally, many bank accounts and brokerage accounts allow the account holder to set up a “transfer-on-death” or “payable-on-death” arrangement, which means that ownership of the account passes to the named beneficiary or the account is liquidated, and the money paid to the beneficiary.
Contact Brown & Hobkirk, PLLC
While estate law can be complex and involve specific requirements, an experienced attorney can help you create an estate plan that fulfills your wishes and meets your family’s needs. If you need help, reach out to the reliable estate law and asset protection attorneys at Brown & Hobkirk, PLLC.