Creating an estate plan helps ensure your final wishes are carried out, and your loved ones have financial security. However, the probate process is a step between your passing and your beneficiaries receiving their inheritance.
Depending on the size and complexity of your estate, the probate process can take months, costing time and money in legal fees. Fortunately, there are ways to avoid the probate process.
Three types of probate
In Arizona, there are three types of probate processes:
1. Informal probate is the most common type used when there are no disputes. An application is filed with the court, and a personal representative is appointed, usually the person the deceased named executor. The personal representative will gather the assets, pay outstanding debts and taxes, and distribute the remaining assets to the named beneficiaries. The entire process can take several months.
2. Formal probate occurs if there are disputes regarding the will’s validity, interpretation, and named heirs. It requires court hearings and a judge’s involvement.
3. Supervised probate is the least common, though most complex, type of probate and occurs when there are significant disputes or the personal representative fails to perform their duties. The court must approve all actions the personal representative takes, and the process may take years.
There are several things you can do now so your estate can avoid probate later, such as:
- Create a living trust that allows you to place your assets in a trust while alive and directly transfer them to your beneficiaries.
- Designate beneficiaries on your financial accounts, including bank, retirement, and investments.
- Create joint ownership with rights of survivorship on your property so the surviving owner automatically inherits it when you die.
Estate planning can be complex. Therefore, if you wish to avoid probate, you will want to work with someone who can help you with the planning process and ensure your documents are legally binding.