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I have already typed my answers out in Word to you and am just going to copy and paste them here in the Chat.
1) A living trust will avoid probate if, and only if, the property is transferred into the living trust before death. In the case of real property, the property must be transferred by a deed naming the trustee of the trust as the grantee. It sounds as if this has been done with your father's trust and therefore, none of the assets in the trust would have to be probated.
2) Section 14-3971(B) of the Arizona Revised Statutes provides that in certain situations, an Arizona probate can be avoided if the value of ALL PERSONAL PROPERTY in the decedent's estate, wherever located, less liens and encumbrances, does not exceed $50,000 as of the date of death. This procedure involves preparing an Affidavit more than thirty days after the decedent's death that contains certain language and delivering the Affidavit to a person indebted to the decedent or having possession of tangible personal property or an instrument evidencing a debt, obligation, stock or chose in action belonging to the decedent.
All of the following conditions must be true to use this Affidavit procedure:
1. Thirty days have elapsed since the death of the decedent.
2. Either: (i) an application or petition for the appointment of a personal representative is not pending and a personal representative has not been appointed in any jurisdiction and the value of all personal property in the decedent's estate, wherever located, less liens and encumbrances, does not exceed $50,000 as of the date of death, or (ii) the personal representative has been discharged or more than one year has elapsed since a closing statement has been filed and the value of all personal property in the decedent's estate, wherever located, less liens and encumbrances, does not exceed $50,000 as of the date of the Affidavit.
3. The claiming successor is entitled to payment or delivery of the property.
A transfer agent of any security shall change the registered ownership on the books of a corporation from the decedent to the successor or successors on presentation of an Affidavit pursuant to this less than $50,000 of personal property exemption.
The motor vehicle division shall transfer title of a motor vehicle from the decedent to the successor or successors on presentation of an Affidavit pursuant to this less than $50,000 of personal property exemption and on payment of the necessary fees.
3) While you do not have an obligation to publish a Notice to Creditors for an estate that is not going to be probated, the claims of any creditors against the estate can persist longer than they would under probate or an interested person can go to probate court and challenge the distribution, thereby forcing probate of the estate.
A non-probate transfer is a valid transfer effective at death by a decedent who, prior to death and acting alone, had the power to revoke or withdraw the transfer and who could have used the property for his own benefit or to satisfy creditors. Under A.R.S. § 14-6102(I), a transfer of real estate by right of survivorship is specifically excluded from the definition.This definition is broad enough to cover most common forms of property transferred by beneficiary designation, such as insurance proceeds, retirement accounts, pay-on-death designated bank accounts and securities with transfer-on-death designations. It appears it would not cover stock or accounts held as joint tenancies because the decedent would not ordinarily have the power to terminate the joint tenant’s interest unilaterally. The definition clearly includes transfers at a person’s death by common revocable trusts such as the one your father had.
Arizona law makes the recipients of non-probate transfers liable to the decedent’s probate estate for claims of creditors and statutory allowances to the decedent’s spouse and children to the extent the probate estate is insufficient. This includes trust beneficiaries. If the trustee of the decedent’s trust has already distributed assets to beneficiaries, those beneficiaries are liable to creditors of the decedent to the extent of their inheritance. If a creditor desires to initiate a proceeding to enforce the liability, a demand must be made upon the personal representative of the estate to present a claim to the trustee. If the personal representative refuses to do so, the creditors may, at their own expense, initiate a proceeding to require abatement. The action must commence within two years of the date of death, unless a claim has been submitted and disputed, in which case the limit is 60 days after final allowance. The personal representative may give notice to transferors of non-probate transfers, including insurance companies and trustees, that there is a deficiency in the probate estate. Upon such notice, the transferor may become liable if distribution is made without satisfaction of the claims of creditors.
So...botXXXXX XXXXXne is that you do not need to publish notice to creditors for an estate that is not being probated, but the creditors have up to two years to lay claim to a non-probated estate's assets.
4) You do not need to wait to distribute non-probatable assets in a trust or small estate. That being said, please note my answer to #3, wherein a creditor can still lay claim to the non-probatable assets for up to two years after the date of death.
5) You need to wait 30 days after death in order to transfer assets under 50K that were not in the trust, but an Affidavit for Collection of Personal Property is the correct way to do this. I am not sure what County you are in, but here is the Maricopa County Packet and your jurisdiction may have something very similar: www.superiorcourt.maricopa.gov/sscdocs/packets/pbse1.pdf. Just call the probate clerk in your county to find out. Otherwise, you can just use this generic form here: forms.lp.findlaw.com/form/courtforms/state/az/az000011.pdf.
To collect personal property (not real property), you will take the Affidavit for Collection of All
Personal Property to the person who has the personal property (cash, bank accounts, stocks and bonds, cars, jewelry, etc.) of the person who died. If you are claiming title to a motor vehicle, the motor vehicle division will transfer title to you upon payment of any required fees.
You do not have to file the Affidavit for Collection of All Personal Property with the court.
Okay then, I *think* I have answered all of your questions, but please let me know if you have more follow ups or need clarification on something! Thanks so much!
Hi Ladylawyer, Thank you so much for your answer. I am not a lawyer and do not understand all the legalese but I'm hoping that I can put my understanding into words and you can tell me if my understanding is correct.
Here is the way I understand things. My father's trust consisted of real estate worth $65,000 and a bank account worth $3000. The fact that these assets were in a trust negates the requirement for probate for these assets. Am I correct in this understanding?
Dad's assets outside of the trust consisted of a car worth $1000 and a bank account worth $2500. Since these are worth less than $50,000, no probate is required for these assets. Am I correct in this understanding?
So, no probate is required for any part of Dad's estate. Please confirm that I am correct in this understanding.
If my understanding is correct and no probate is required and no notice to creditors is required, claims against Dad's estate can be filed for up to two years after death. Is there any way to file some kind of notice to reduce that time to file claims to four months or some other length of time less than two years?
I am sorry to be so anal in my questions but I am trying to clear up the "legal fog" in my mind. Please answer specifically my questions above where I have asked if my understanding is correct.
Hi Steven! Happy to keep assisting you. I will go through your questions one by one.
Here is the way I understand things. My father's trust consisted of real estate worth $65,000 and a bank account worth $3000. The fact that these assets were in a trust negates the requirement for probate for these assets. Am I correct in this understanding? Yes, that is correct. Any assets in a trust do not need to be probated under AZ law.
Dad's assets outside of the trust consisted of a car worth $1000 and a bank account worth $2500. Since these are worth less than $50,000, no probate is required for these assets. Am I correct in this understanding? Yes, that is correct. Any estate (note: "estate" does not mean "trust") worth $50,000 or less in personal property does not have to be probated in AZ. Personal Property includes furniture, jewelry, artworks, cars, bank accounts, stocks, bonds, etc.
So, no probate is required for any part of Dad's estate. Please confirm that I am correct in this understanding. Yes, your understanding is correct.
If my understanding is correct and no probate is required and no notice to creditors is required, claims against Dad's estate can be filed for up to two years after death. Is there any way to file some kind of notice to reduce that time to file claims to four months or some other length of time less than two years? The only way to reduce the time the creditors have to file a claim is if everything was probated. Probate can take up to a year or two, so while the creditors may not be able to file a claim after 60 days, no one is going to be able to do anything with the assets until probate is over. Your choice then, is to distribute and use the assets in the trust and estate now, with the knowledge that the creditors can file a claim against them for up to 2 years OR probate the assets, thereby extinguishing the creditors' claims after 60 days, but having to wait to do anything with the assets until probate is over.
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