Prescott income tax and paralegal services - family law, estate planning, business formation, and income tax preparation
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Arlene Rheinfelder, EA, CP AZCLDP

"I help solve people's problems. There is nothing more rewarding than helping someone through a difficult situation, and helping them to find a good resolution." 

 

Melissa Hill, AZCLDP

I love the challenge of finding a way to help each person's unique situation. It is never the same because each person is different with their own needs and wants.

Avoiding Probate

Estate Planning elementsProbate.  Just mention the word, and chills run up the spine. Some businesses are even targeting seniors to scare them into purchasing expensive estate plans to avoid probate. They hold luncheon seminars telling seniors that a Will won’t avoid probate, and then try to sell the senior a Trust for thousands of dollars. Just because a person has a Will does not mean that probate will be required.  In many cases, there are other, less expensive options that would also avoid probate.

What is probate?

First, let’s define probate. Probate is a court proceeding to transfer assets and settle the debts of a deceased person.  At a minimum, a simple probate in Arizona takes at least 4 months to complete and can cost $1600 or more. A probate proceeding may also be opened if the Trustee of the deceased person’s Trust is not performing his or her duties, or if someone disagrees with part of the Trust.  

What is the best way to avoid probate?  

Stay alive.  Seriously, it depends.  Most Arizona real estate can be transferred with a Beneficiary Deed for less than $200.  That is substantially less than the cost of a simple probate.  If a person owns real estate in multiple states, it may be better to use a Trust to manage the transfer of property.  Depending on your unique situation, a Trust may be the best solution, or there may be other less expensive ways to transfer your assets upon death without a probate.

What type of assets require a probate to transfer?

In general, if property requires the signature of the owner to transfer title or access it, then it may require probate for transfer after death, unless a non-probate transfer device has been put in place before death.

What are some simple ways to transfer property without probate and without a Trust?

This table shows typical assets and ways to transfer without a probate. Some actions must be taken before death.

Property

Signature Required

Non-probate transfer options

(MUST be done before death)

Small estate transfer options

(After death)

Financial Account

Yes

Name a POD or TOD beneficiary

Affidavit of Collection if less than $50,000

Real Estate

Yes

Beneficiary Deed

Affidavit of Transfer of Real Property if less than $100,000

Motor Vehicle

Yes

Beneficiary Designation Form

Affidavit of collection if less than $50,000

Grandma’s Dishes

No

Give them to the person listed in the Will

 

How can I decide the best solution for my situation?

You can ask an attorney to decide for you, or you can get information from an estate planning professional like Prescott Tax & Paralegal and make your own decision about what is best for you.

Will having aTrust avoid probate?

Usually. However, if there is a disagreement over distribution, the Trustee acts improperly, or assets were not placed into Trust ownership, a probate may be opened. In a recent case, a probate was opened because the bank incorrectly titled the money market account as The Smith Trust instead of the The Smith Family Trust. When the original trustee died, the bank refused to release funds to the successor trustee because the name on the account did not match the name on the Trust document. The bank refused to pay for the proceeding, and refused to admit their error in incorrectly titling the account. Ultimately, we were able to obtain a court order forcing the bank to release the funds, but not without cost to the heirs was in time and money.

If you have questions about avoiding probate, estate planning, or how to transfer assets of a deceased loved one, call Prescott Tax & Paralegal at (928) 778-3113.

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Please Note: We are NOT attorneys and do NOT provide legal advice. Your information is confidential, but we do not have attorney-client privilege. If you need legal advice, you will be referred to an attorney.

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