Estate Planning: A daunting process made simple
The concept of estate planning can be overwhelming for most people. However, the process of probate can be a lot more challenging for your family if you don’t ensure your assets are protected. There are many different avenues to take regarding estate planning, as not everyone fits into the same “box”. Infinity Legal can help you navigate this process, ensuring your assets are properly protected and giving you and your family peace of mind.
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Probate: A not so scary word if you’re prepared
What exactly IS probate?
The probate process in Arizona is the act of legally passing assets from a deceased person to his or her beneficiaries with or without a Last Will and Testament. The process refers to period of time when a probate court supervises someone’s estate.
Generally, only assets owned in the deceased person’s name alone must go through probate. And if the value of those “probate assets” is small enough, the family can take advantage of probate shortcuts (i.e. informal probate), which are less expensive than regular probate.
The probate process in Arizona
There are two main types of probate processes in Arizona, informal and formal. Fortunately, most Arizona probates are informal. Informal probates tend to be less expensive than formal probates and generally do not require any court hearings. Formal probates, on the other hand, tend to be more complicated. If a probate was needed and not filed within 2 years of someone’s death, or if a Will is contested, formal probate is required. Formal probate includes at least one court hearing. In a contested formal probate, there are several court hearings, depositions, motions and discovery, just like in any other litigation. Costs skyrocket quickly!
Arizona’s probate timeline
IN ARIZONA, if the probate is uncontested and is informal, most probates last between six to eight months depending on how quickly the Personal Representative (executor) completes the required duties – however, since Covid, the Court system has been extremely backed up and many probate cases are taking upwards of 12 months or longer. By law, probate cases must be open for at least 4 months so creditors can stake their claims, if any.
What makes some probate cases drag on for years, then? There are three main causes:
- Family fights. If a family member challenges the will, or if siblings can’t agree about how to divide a parent’s assets, then a court may have to intervene to settle matters. That means acrimony, delay and expense.
- A very large estate. If the estate is so big that it owes federal or state estate tax, things are more complicated. There’s no way the estate will be settled before the estate tax return is due, nine months after the death, and many estates receive a six-month extension for filing because the return is so complex. But, more than 99.5% of estates do NOT owe federal estate tax, and fewer than 20 states impose their own estate tax.
- Ongoing income. Finally, there are the estates that we hear of in the news—those of celebrities such as Michael Jackson or Marilyn Monroe. These estates continue to receive income (millions of dollars’ worth, in some cases) for decades after the death.
Estate planning is very scary for many people; just the thought of your impending death can be frightening. But with proper estate planning tools in place BEFORE it’s too late, you can be assured your family and loved-ones will be able to navigate the process with as little stress as possible.
Does probate mean the state takes all of my assets if I don’t have a will?
NO! If you die without a valid will (the legal term for this is dying “intestate”), then state law kicks in. Generally, your spouse and children are first in line to inherit. However, the rules vary from state to state (in some states, a surviving spouse and minor children share the deceased parent’s assets). Does the state ever take your assets upon your death? Yes, but only when no relatives can be found. As long as your personal representative (the person in charge of wrapping up your estate) can locate your great uncle’s long-lost grandchild’s child, the state won’t take your money. The term for this is called “escheat,” and there’s a reason you’ve probably never heard it—escheat is very rare.
How long does probate take?
The time period for probate is mandated by state law (in Arizona, probate requires a minimum of four months), in order to give creditors time to file claims against the estate. The length of the creditors’ claim window varies from state to state; it usually starts when notice of the probate proceeding is published in the local paper and runs from three or four months on the short end to a year on the long end.
After that waiting period is over, the estate can be closed as soon as the personal representative has gathered all the assets, paid debts and taxes. In states with estate or inheritance tax, the estate may need to get a tax clearance letter from the state department of revenue. As a practical matter, it usually takes a few more months to get everything in order. But most estates are finished within a year.
After that waiting period is over, the estate can be closed as soon as the personal representative has gathered all the assets, paid debts and taxes. In states with estate or inheritance tax, the estate may need to get a tax clearance letter from the state department of revenue. As a practical matter, it usually takes a few more months to get everything in order. But most estates are finished within a year.
My will protects my assets from probate, right?
IT ALL DEPENDS! If you only have a will and have property values at or over the Arizona probate limits ($100,000 combined equity for all real estate owned in Arizona, $75,000 for all personal property including vehicles, bank accounts, etc.), your family will likely be required to go through a formal probate process before your estate can be settled. Additionally, if you own real estate in other states, you may have to go through the probate process in each state you own property in. Spending just a little time setting up your estate planning can and will prevent your estate from probate, as well as avoiding even more of a headache for your family! CALL NOW or CONTACT ME to get the process started!