Probate procedures are often considered complicated and slow. Thus, it’s important to note that alternative methods are available for directly transferring assets to beneficiaries without probate. Read on to learn more about them and how an estate planning attorney can help.
Assets Not Subject To Probate In Arizona
In Arizona, several assets are exempted from undergoing probate, providing a smooth property transfer upon an individual’s death. Understanding these exemptions is crucial to avoid probate complications.
Assets In A Living Trust
A living trust is a legal arrangement in which an individual (grantor) places their assets into a trust during their lifetime. It is to be managed by a trustee and ultimately distributed to beneficiaries according to the grantor’s instructions.
Community Property With A Right Of Survivorship
Community property with a right of survivorship is a legal arrangement where spouses jointly own property. Upon the death of one spouse, the ownership automatically transfers to the surviving spouse. It ensures that the property passes directly to the surviving spouse without the need for probate.
Jointly-Held Property With A Right Of Survivorship
In Arizona, jointly held property with a right of survivorship provides another avenue to avoid probate. Property owners can hold assets as joint tenants with the right of survivorship, which enables automatic transfer of ownership to the surviving joint tenants, bypassing probate entirely.
Retirement Accounts
In Arizona, if beneficiaries are adequately named in retirement accounts like 401(k) plans or IRAs, the property held within these accounts can avoid probate. It means that parties designated as beneficiaries will receive the property directly. It is crucial to ensure that beneficiaries are correctly identified in these retirement accounts to facilitate a smooth property transfer.
Life Insurance Proceeds
All life insurance policies in Arizona with a named beneficiary aren’t subjected to probate when the insured dies. If a minor has been listed as the beneficiary, a conservatorship must be set up via probate court to hold the life insurance proceeds until the beneficiary becomes an adult (turn 18 years).
Payable On Death Bank Accounts
POD (Payable-on-Death) bank accounts operate by designating a beneficiary for the account. When the owner does, account ownership passes directly to the beneficiaries. They aren’t subject to a probate process.
Transfer On Death Registered Securities
TOD (Transfer-on-Death) registered securities function similarly to POD (Payable-on-Death) bank accounts, automatically transferring the securities to the designated beneficiary upon the owner’s death. A POD account designates a beneficiary for bank accounts, while a TOD account designates a beneficiary for registered securities or investment holdings.
Real Estate With A TOD Deed
A transfer on death deed allows a real estate owner to designate a beneficiary who will inherit the property automatically upon the owner’s death. It eliminates the need for a court-supervised probate process, saving time and costs and simplifying the property transfer outside the probate system.
Pension Plan Distributions
A pension plan distribution refers to the disbursement of funds from a retirement plan to a retiree or beneficiary. Although there are instances where pension plan distributions may be subject to income tax, it is important to note that they are not considered estate assets. As a result, pension plan distributions are exempt from the probate process.
Let An Estate Planning Lawyer In Arizona Help
When dealing with complex estate matters in Arizona, seeking legal counsel from an estate planning lawyer is crucial. They can provide guidance and clarification on the exemption of assets from probate. Keystone Law Firm in Arizona is home to skilled estate attorneys who can ensure an efficient transfer of your properties to their beneficiaries. With their knowledge and experience, Keystone Law Firm can help you navigate the often complex estate planning process and ensure a successful outcome.
Summary
Probate procedures can be complex and time-consuming, but there are ways to avoid or bypass this process for certain assets in Arizona. Properties such as those held in a living trust are exempt from probate. Similarly, community property and jointly-held property with a right of survivorship do not require probate. Retirement accounts with named beneficiaries, life insurance proceeds, co-owned savings bonds, and payable-on-death bank accounts are also exempt. Real estate with a transfer-on-death deed and pension plan distributions also do not go through probate.
However, seeking legal counsel to understand the specific exemptions and ensure a smooth distribution of assets is essential. Keystone Law Firm has experienced probate attorneys who can guide and assist throughout the probate process.