When someone writes a will, two of the most important tasks are to name someone to manage their estate (known as the executor or personal representative) and name beneficiaries to receive their assets. The executor will have full authority over the estate during probate, but it’s important to note that beneficiaries have certain rights and privileges throughout the probate process. A beneficiary’s key rights include:
- The right to contest the executor’s appointment
- The right to contest the will
- The right to be informed of their designation and inheritance
- The right to obtain a copy of the will
- The right to reasonable diligence from the executor
- The right to request an accounting
- The right to contest the executor’s actions
- The right to approve the executor’s compensation
Contesting the executor’s appointment
First and foremost, all interested parties to an estate (heirs, beneficiaries, creditors) have the right to contest an executor’s appointment by the court. A probate judge is bound to the decedent’s elections in their will, unless someone offers indisputable evidence that the executor is unfit for the position (e.g. a criminal record, a known history of fraud, or a recent fallout with the decedent).
Contesting the will
Beneficiaries have the right to contest a decedent’s will on the grounds that the will is invalid. Contesting a will is challenging, but it’s possible in the following circumstances:
- The will is forged
- The testator drafted the will under undue influence (duress, manipulation, elder abuse)
- The will is improperly signed
- The will is improperly witnessed
- The testator was mentally incapacitated
- The testator was a minor (under 18)
Notice of designation and inheritance
Beneficiaries are entitled to know that they’re named in the will, and they have the right to know what their inheritance is. The executor typically provides this information when he or she serves notice of opening probate to the estate’s interested parties.
Keep in mind, however, that the beneficiary doesn’t have the right to physically see, appraise, or receive their inheritance until probate closes and the property’s title of ownership is transferred.
Obtaining a copy of the will
Beneficiaries have the right to obtain a copy of the decedent’s will from the county probate court. The executor normally provides a copy of the will when he or she serves notice of opening probate to the estate’s interested parties, but the executor isn’t under any obligation to furnish a copy of the will. In fact, because probate proceedings are public matters, anyone can request a copy of the will from the county probate court.
Executors are given a reasonable amount of time to complete probate and transfer an estate’s assets, but they’re expected to be diligent in their efforts. Generally speaking, an executor should transfer assets to beneficiaries within a year of the decedent’s passing.
That said, most cases of informal probate wrap up in 6 – 8 months. In situations where the executor needs more time to settle the estate before transferring assets, the executor will need to provide the court (and by extension the beneficiaries) with a valid reason for the delay.
Requesting an accounting
Beneficiaries have the right to request a report of the executor’s activities (known as an accounting). An accounting should always be delivered in writing, and it should be supported by bank account statements, receipts, and confirmations of asset transfers. If the accounting doesn’t line up, the beneficiary can file a complaint with the court.
Contesting the executor’s actions
A beneficiary can’t simply object to the executor’s actions because they don’t like how they’re handling the estate—you need to provide the court with evidence of fraud or mismanagement. In most cases, the evidence usually comes from discrepancies in an executor’s accounting report.
If the court finds sufficient evidence of fraud or mismanagement, the judge will dismiss the executor and appoint a new personal representative to manage the estate. The replacement is usually another family member or trusted advisor, but in some cases the court will appoint a third-party special administrator.
During probate proceedings, beneficiaries have up to one year to contest the actions of the executor. Once the estate has been closed and probate is concluded, beneficiaries have six months to file a complaint with the court.
Approving the executor’s compensation
Most executors don’t request compensation for their services (because the executor is usually a family member), but executors are entitled to receive compensation for their time. Beneficiaries have the right to review an executor’s requests for compensation, and ultimately approve or deny the requests.
If probate is closed and the executor’s compensation is granted without beneficiary approval, the beneficiaries have up to six months to file a complaint with the court. If the court determines that the executor received unreasonable compensation, the executor may be forced to pay the difference to the beneficiaries with interest.
Limitations of beneficiaries
There are two notable limitations to a beneficiary’s rights during probate. First is a beneficiary’s lack of access to private information. While beneficiaries can obtain a copy of the will and view any public documents filed with the court, beneficiaries do not have the right to view private information such as asset values, appraisals, interests, or liabilities.
The second limitation applies to insolvent estates. When an estate has more liabilities than assets, the estate is considered insolvent and the executor will be required to liquidate all assets to settle the liabilities. This liquidation process is known as abatement.
Creditors have priority over beneficiaries when it comes to claiming an estate’s assets, so in cases where abatement is necessary the beneficiaries listed in the will unfortunately won’t receive the bequeathed assets.
Can a beneficiary receive assets outside of probate?
Assets that have a designated beneficiary listed on the account are designed to transfer ownership to the beneficiary automatically upon the owner’s death. To process the transfer, the beneficiary just needs to present the financial institution holding the assets with a copy of the owner’s death certificate.
Non-probate transfers can usually wrap up in as little as a few weeks—which is significantly better than probate transfers that can take months or years to complete. As such, it’s usually best to position as many of your assets as possible to bypass probate by utilizing designated beneficiaries.
The following assets typically allow beneficiary designations, and are considered non-probate assets:
- Bank and brokerage accounts with a payable-on-death or transfer-on-death beneficiary
- Real estate owned as joint tenants or as tenants in the entirety
- Retirement accounts (401k, IRA, etc.)
- Life insurance policies
Do You Need Help with Probate Matters?
As you can see, AZ probate laws can be complex. It requires a number of steps and without the right approach, it’s easy to get lost in the details.
At JacksonWhite, we can make probate a clear, easy-to-understand process. If you’d like help with probate matters, call the talented team at JacksonWhite Law today.
We can help explain your legal options and direct you to the probate solution that works for you and your loved ones.