How Can Glendale Residents Effectively Plan Their Estate to Avoid Probate?

What Is Probate?

Probate is a legal proceeding in which a decedent’s assets (person who has died) are distributed while overseen by the court. It happens in a court in the county where the decedent was living at the time of their death.

Not all estate items have to go through probate. In Arizona, probate is required for assets not owned by a trust, estates with personal property value at a minimum of $75,000, or real estate value at a minimum of $100,000.

Sometimes, people think having a will is enough to avoid probate. However, a will must go through probate in Arizona, even if the will is detailed and clear about the asset distribution. Probate must oversee the distribution as detailed in the will.

The downsides of going through probate include how long it takes (which can be up to a year or even longer if the estate is contested), the costs involved (court and legal fees), and the fact that it’s a public process, meaning anyone can learn about the estate and how it was distributed. These are all good reasons to seek alternatives.

What Are Some Tactics to Avoid Probate Court?

There are several.

POD/TOD

These stand for payable on death or transfer on death. The estate’s owner can have several assets designated this way, which means they’ll name a beneficiary who will receive the asset after the owner’s death. That can include bank accounts, vehicles, brokerage accounts, and real property. It’s also possible to list multiple beneficiaries as long as the percentage each should receive is clearly explained.

Each asset may have paperwork and requirements to set up as POD/TOD. To ensure that these are done in a legally binding manner, it’s highly recommended that you work with an experienced estate planning attorney who can help guide you through the process.

Rights of Survivorship

When someone acquires property or the title to property, they can designate the rights of survivorship in two ways:

• Joint Tenants with Rights of Survivorship. The property owner can name anyone as a joint tenant whether or not they’re related to the owner (and can name more than one person). Each person owns an equal share of the property, such as a home; when one person dies, their share goes to the other(s).
• Community Property with Rights of Survivorship. This is similar to Joint Tenants, except it’s meant only for married couples.

Trusts

Trusts are a popular estate planning tool because not only do they bypass probate (and remain private), they’re often easier to distribute after the decedent passes and incur fewer costs in the process. That’s because the assets are put into the ownership of a trust, which a trustee maintains. The estate is no longer owned by the previous owner (although in many cases, they can be the trustee and still control the assets), so when the owner passes, the assets go to the named beneficiaries without needing probate oversight.

There are also various types of trusts that accomplish different things. Which you choose depends on your estate and the beneficiaries involved, but here are some of the most prevalent ones. To determine what type of trust might be best for your estate, work with an estate planning attorney.

Revocable living trust. With this type of trust, the person who placed the assets in the trust can still modify the trust, have access to the assets, and change the beneficiaries as needed. The assets aren’t distributed until they’ve passed. However, a revocable living trust can be targeted by creditors

Irrevocable trust. Once the assets are placed in this type of trust, the person who placed them there can no longer change them and has no control over them. However, the assets are then protected from creditors.

Spendthrift trust. These come into play when the estate’s owner would like to provide funds to a beneficiary who is not financially savvy or tends to spend money too quickly. This trust can be structured so the beneficiary doesn’t have access to the funds, but they can be allotted out for specific purposes (such as direct payment of rent).

Special needs trust. This provides for a beneficiary who has special needs without compromising their eligibility for disability benefits.

Is There Anything Important That Can’t Be Covered in the Above?

Without knowing the exact specifics of your individual estate, it’s not possible to say what might not be included in the above. However, there is one universal item that can’t be done by any of the above mechanisms and is likely to have to go through probate: Guardianship of a minor child.

The legal process for a parent to designate a legal guardian for a minor child in the event of both parents’ deaths requires a will. A trust cannot do this. A will must be drawn up, the guardian named, and the probate court will oversee the process to have the guardian legally installed.

What Should I Do if I Need Help Developing an Estate Plan?

Call the Turner Law Firm as soon as possible at 480-618-1221 to set up a consultation. We understand that it’s vital for you to protect your assets and ensure your wishes are carried out after your passing. Every estate is unique, so there’s no one-size-fits-all approach to estate planning. Our team of experienced, knowledgeable estate planning attorneys can guide you through the specifics of your estate and help determine the best path forward for you and your beneficiaries.