Probate can be a costly, time-consuming process, so it’s natural to question if probate is necessary. To understand what happens if a will is not probated, it helps to understand the difference between probate and non-probate assets.
Any assets owned solely by the decedent are subject to probate. This includes:
- Individual bank accounts in the decedent’s name
- Brokerage accounts or life insurance policies that list the decedent or the estate as the beneficiary
- Real property titled in the decedent’s name or held as tenants-in-common (TIC)
- Personal property (cars, jewelry, furniture, collectibles, etc.)
- Business interests (a personal stake in a partnership, corporation, or LLC)
Each of these assets are titled in the decedent’s name, and only probate court has the authority to transfer the title to the heirs and beneficiaries listed in the will. If the decedent passes away without a will, these assets will be dispersed according to the state’s intestacy succession laws, but they are still required to go through probate court. If a will is not probated, these assets will remain frozen in the decedent’s name.
To simplify the probate process, the courts allow certain assets to transfer ownership immediately upon the death of the decedent, without going through probate and regardless of the existence of a will. In many cases, the directives surrounding these assets supersede those in the will. Non-probate assets include:
- Retirement accounts (e.g. 401k, IRA)
- Brokerage or bank accounts held in joint tenancy, or with a transfer-on-death (TOD) or payable-on-death (POD) beneficiary
- Life insurance policies with a 3rd party beneficiary
- Real or personal property held in a trust
- Real property held in joint tenancy or as tenants by the entirety
Even if a will is not probated, these assets will transfer to the designated beneficiaries at the time of death. Most institutions require a death certificate to confirm the decedent’s passing and initiate the transfer of ownership—a process much simpler than probate.
If the probate process is not opened, the decedent’s creditors have up to one year to file a claim against the estate. Once probate is opened by the court and a notice is filed in the local newspaper announcing the probate, creditors only have four months to submit a claim. Keep in mind, however, that regardless of the time frame, heirs and beneficiaries listed in the will are not liable for the decedent’s debts unless they are a surviving spouse, or they personally guaranteed or cosigned for the debt. The law requires that all the decedent’s debts, bills, and taxes must be paid before any distributions are made, but the liability for said obligations does not extend to beneficiaries listed in the will.
The small estate exception
To simplify the transfer of assets for smaller estates, the state of Arizona allows you to bypass the entire probate process if the estate meets two guidelines:
- The decedent’s personal property value is less than $75,000
- The decedent’s real property value is less than $100,000
To do this, fill out and submit a Non-Probate Affidavit. The individual filling out the affidavit will need to affirm their relationship with the decedent, list the value of the property, provide some general information about the decedent, and itemize the decedent’s assets and liabilities. Once complete, submit the affidavit to the Superior Court of Arizona.
If there is no urgency to transfer the decedent’s assets, or if the estate is insolvent (not enough assets to cover liabilities), many people avoid the hassle by never opening probate. If the decedent left a will, you are required to file the will with the county court, but there is no penalty for not opening probate once the will is properly filed.
Statute of limitations
In the state of Arizona, probate court procedures are dictated by a set of laws called the Uniform Probate Code. Probate should be opened within two years of the decedent’s passing. If probate isn’t opened, any objections to the will need to be filed within the same two years.
Personal representative’s obligations
The personal representative, or executor, is the individual nominated by the decedent to handle their affairs when they die. It is his or her responsibility to manage the estate throughout the probate process, especially when it pertains to resolving the decedent’s debt obligations and distributing assets to the heirs and beneficiaries.
Even if you promised the decedent that you would serve as the personal representative to manage their estate’s affairs, you are not required to accept the responsibility. The will only serves as a nomination; you retain the right to decline. Your minimum obligation would be to file the will with the county court, at which point the judge can appoint an administrator to handle the estate’s affairs. The administrator is frequently next-of-kin, but if there are any disputes the court can appoint a neutral third party who can be counted on for fair and unbiased administration.
Legal obligation to file a will
If you are in possession of someone’s will, either as the nominated personal representative, a family member, or even a friend, you have a legal obligation to file the document with the county court upon the decedent’s passing. Most states allow anywhere from 30 days to three months from the date of death to do this.
Failure to file a will within the allotted time frame isn’t a criminal offense, but you may be responsible for any consequences that arise from your lack of action. For example, someone who is financially harmed by your failure to file the will can initiate a lawsuit against you to recoup damages. You could also be subject to criminal charges if the court finds that you concealed the will, or deliberately refrained from filing it, for financial gain.
If the probate process sounds like more trouble than it’s worth, or if you know the decedent’s estate is insolvent, you have the right to file the will and walk away. By filing the will with the county court within the appropriate amount of time, you are fulfilling your legal duty, and have no further obligations. Any interested parties who wish to initiate the probate process can petition the court to open probate and carry on with the proceedings without your involvement.
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.