How Do I Know When I Need To Probate My Loved One’s Estate?

Learn what triggers a probate and when probating your loved one’s estate is necessary.

When trying to figure out whether an Arizona probate estate is required, the Phoenix probate attorneys at Platt & Westby, P.C. suggest that it is often helpful to look at the decedent’s assets (especially how they are titled) and the decedent’s debts.

The manner in which decedent held title to his/her various assets makes a big difference. Real estate can be held in a variety of ways including solely and separately, joint tenancy, community property, and as tenants in common. Often the joint tenancy and community property titling is coupled with “right of survivorship” language. This additional language means that when a property is held by two or more persons, the surviving persons receive the deceased person’s share of the property automatically at the time the deceased person passes. This happens without the need for probate. On the other hand, property held solely and separately, or as tenants in common usually require a probate in order to transfer title or to sell the property. Similar to the manner in which title is held, it also depends what name the property is titled in. In the event that the decedent titled his/her real estate into a trust, a probate will be unnecessary. Instead, the trustee or successor trustee as the case may be, can usually proceed to administer the trust without court proceedings.

Bank accounts can be a little tricky because you have to distinguish whether a person associated with the account is an owner, a signer, or a beneficiary. Jointly owned accounts will normally pass to the surviving person automatically without the need for a probate. When the account is owned only by the decedent, and there is a surviving person who is only a signer on the account (or acting as an agent under a power of attorney on the account), then the signer/agent will not have access to the funds upon the owner’s death. Instead, it will have to be determined whether the account has another surviving owner or had a beneficiary designation on it. If there is a surviving joint owner, that person will likely own the funds remaining in the account and will have continuing access to them without anything further. If there is no surviving joint owner, then the next step is to determine if there is a beneficiary to the account. These beneficiary designations are often referred to as TOD (transfer on death) or POD (payable on death) designations. Essentially, these POD/TOD designations work just like a beneficiary designation on a life insurance policy. In order to obtain the funds in the decedent’s account where a valid POD/TOD exists, the person entitled to the funds applies to the bank institution for the funds, proving who they are and providing information about the decedent’s passing. In most cases, these kinds of designations will permit distribution of the funds without opening a probate proceeding. An example where such a designation would not work is when the beneficiary passed away before the owner of the account dies and the owner did not update the POD/TOD designations. In that case, a probate would need to be opened up to collect the funds, to determine who gets the funds, and to distribute them to the person(s) entitled to them.

Life insurance policies, 401(k)s, IRAs and brokerage accounts need to be reviewed for many of the same issues. If there are beneficiaries named (other than payable to the “estate”), then those beneficiaries will need to make application directly to the insurance company or firm holding those funds. Where one or more beneficiaries are no longer alive, or where the beneficiary is named as the “estate”, the funds will be payable to the probate estate, and the required probate proceedings will determine whom these funds should be distributed to.

Stock held outside of a brokerage account, vehicle and boat titles, and business interests will require a probate proceeding because they usually do not provide a way to avoid probate. However, see Platt & Westby’s blog article “Transfer of Vehicles Without Necessity of Probate”  which tells how to set up ownership titles on vehicles to avoid probate.

After reviewing the decedent’s assets to determine if probate is necessary, you may also want to review the debts to see if opening a probate will offer some benefit. Perhaps you are owed money by the decedent. Under certain circumstances, a creditor can open an estate, and make a claim for what is owed. Perhaps you want to utilize the creditor claim period to force creditors to come forward. Or, perhaps, you know some creditor claims are specious and you wish to utilize the probate proceedings to challenge the alleged debt. One or more of these might make opening a probate sensible.

Aside from needing to open a probate proceeding, there are a number of other reasons why you might want to file probate. Sometimes, the surviving family desires access to information about the decedent. Other times, there may be intangible unliquidated assets such as a personal injury claim that needs to be brought on behalf of the estate.  Sometimes, court oversight is beneficial. Platt & Westby, P.C.’s attorneys have over forty years of experience in probate matters and can help you determine when it is appropriate to open a decedent’s estate and then, guide you through the process. Platt & Westby offers a free, no-obligation consultation to discuss your case and help you make an informed decision. Contact us at 602-277-4441 to set up an appointment.