Updated: May 21, 2022
One of the main benefits of estate planning is arranging property (real and personal) to pass to heirs and beneficiaries without the involvement of probate. Probate is a legal process for settling many estates. This process can be expensive and time-consuming, so it’s often worth considering how you can minimize the time your loved ones need to spend in probate or eliminate the need for probate altogether.
Keep reading for four ways to pass on your assets outside of probate.
Using a living trust is one of the most popular ways to transfer assets to heirs without going through the probate process. Unlike the probate-avoidance methods we cover below, almost any type of asset can be transferred into a trust. With a living trust, the settlor (creator of the trust) transfers legal ownership of assets to the trust and becomes the first trustee. After the settlor passes away, the successor trustee passes on the assets to the beneficiaries in accordance with the trust’s instructions—with no probate involvement.
A common way for Arizonans to transfer real estate outside of probate is using a beneficiary deed. This legal document acts as a transfer-on-death deed for real estate owners. After an Arizona property owner executes a beneficiary deed for real estate, he or she will retain control over the property until death.
Small Estate Affidavit
Arizona, like most other states, has a simplified procedure for estates below a certain monetary value. Personal property, which is, essentially, all assets besides real estate, may be transferred to beneficiaries through this simplified method as long as the value is less than $75,000. Real estate valued at less than $100,00 is also eligible for the Arizona small estate procedure.
Beneficiaries who hope to inherit property under the small estate affidavit are subject to certain waiting periods, however. And, mortgages often have due-on-transfer clauses that require heirs to pay the entire balance once the mortgage is transferred to them. Before relying on a small estate affidavit to transfer real estate in Arizona, verify that your goals will actually be met through that method.
Joint Tenancy with Right of Survivorship
The most common way for couples to transfer property to one another is through joint tenancy with a right of survivorship. Joint tenancy is a way of owning real estate. When two individuals take ownership of the real estate and own equal shares in the property, one of the joint owners will receive the property outright when the other joint owner passes away. Usually, presenting the decedent’s death certificate to the financial institution is all that needs to be done for this process to occur outside of probate.
The less time your loved ones spend in probate settling your estate, the more of your success you can pass down. The four methods we covered in this blog are commonly used by Arizonans to distribute assets outside of probate, but your estate needs personalized legal attention to come up with the best plan.
Monahan Law Firm, a mission-focused Arizona law firm, helps estate planners achieve their goals and, just as importantly, peace of mind. Let us know how we can help you today.