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Arizona Probate & Minors

In Arizona, what happens if a person dies and leaves property to minor children? 

Well, the answer depends upon the types of assets the decedent owned as well as the decedent's estate plan.

Typically, a decedent's assets fall into two distinct categories:

  1. Probate Assets
  2. Non-Probate Assets

This distinction is important because it governs how a decedent's assets will be managed and/or distributed after the decedent's passing.

Probate Assets

The following types of property are often probate assets:

  • Real estate not titled in joint tenancy or community property with right of survivorship;
  • LLC membership interests;
  • Partnership interests;
  • Shares of stock;
  • Automobiles; and
  • Other personal property.

Probate assets will either be distributed pursuant to the terms of a will, if the decedent had one, or Arizona's intestacy statute, if the decedent dies without a valid will.

Non-Probate Assets

The following types of assets are often non-probate assets:

  • Real estate titled in joint tenancy with right of survivorship;
  • Real estate titled as community property with right of survivorship;
  • Life insurance;
  • Bank accounts titled in joint tenancy with right of survivorship;
  • Bank accounts titled as community property with right of survivorship;
  • Individual Retirement Accounts ("IRA"); and
  • Other retirement accounts governed by ERISA.

Typically, non-probate assets are distributed pursuant to beneficiaries who are named in the documents and/or plans associated with the non-probate assets. 

Minor Children

Where were we? Oh yeah, what if a decedent leaves assets to minor children?

Arizona law doesn't allow children under the age of majority — typically eighteen (18) years of age — to own property. This can often create problems when either probate assets or non-probate assets are to be distributed to a minor, largely because it requires the appointment by the probate court of a person called a conservator.

The issues in a particular case will largely depend upon whether a decedent's assets are probate or non-probate assets.

Probate Assets

In terms of probate assets, if the decedent died with a will that included what's often called a "minor protection clause," a person named in the will can manage the assets that the minor was to receive pursuant to the terms of the will, without the court-appointment of a conservator. However, if the decedent dies without a will, often called dying intestate, then the court must appoint a conservator to take title to the assets until the minor reaches the age of majority.

Further, if a person dies intestate, the probate assets generally can't be administered through a process called informal probate, which doesn't require a court hearing; rather, a court hearing is typically required through a process called formal probate.

Non-Probate Assets

In terms of non-probate assets, most of the documents that govern these types of assets, e.g. life insurance policies or individual retirement accounts, will provide for the management of the assets without the need for the court appointment of a conservator. That said, however, if there are no named beneficiaries associated with a non-probate asset, then the probate estate is often the default beneficiary, which is subject to all of the issues and problems discussed above. 

This brief overview of some important considerations associated with probate in Arizona is by no means comprehensive. Always seek the advice of a competent professional when making important financial and legal decisions.

Arizona Estate Planning AttorneySteve Cook is a estate planning lawyer at Cook & Cook. Although his main office is located in Mesa, Arizona, he represents clients throughout the Phoenix, Arizona Metropolitan area including the following east valley cities: Scottsdale, Paradise Valley, Tempe, Chandler, & Gilbert.

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