One thing we all have in common: we won’t live forever. The only sure thing in life is death. How soon that may be depends on a lot of factors. Always hope for a long life but be prepared for the unexpected. At King Law Firm Attorneys at Law, Inc., we say the best time to prepare for death is before you die, and if you are a resident of one state with property holdings or personal attachments in another state, doing so may become complicated.
King Law Firm Attorneys at Law, Inc. provides Arizona residents, duel residents of California and Arizona, and California residents with property in Arizona high-quality legal representation and assistance in all aspects of estate planning and probate.
For Arizona Residents
Not every state has the same rules for how to handle wills, trusts and probate. Below are a few common differences Arizona residents should know when putting together a will or trust, or are beginning the probate process. (For a general overview of what each of these aspects entails, visit our individual wills, trusts and probate pages.)
In Arizona, a will must be witnessed by two people. If it is notarized as well, the court will consider the will “self-proved” and authentic without witnesses having to testify to its validity.
Holographic wills, which are deemed valid in Arizona, do not have to be witnessed.
Trusts are generally governed by the laws of the state for which the trustee resides, no matter where it was originally written. Exceptions include the interpretation of the Trust’s validity. In other words, if a trust is written in California, but the trustee dies while residing in Arizona, Arizona laws will govern the trust, but the interpretation of its validity must follow California law.
Does this mean you should redraft a trust if moving from one state to another? It depends on how the trust was written, and what laws change between each state. For example, it may be better to draft a new trust if the states do not share the same community property rules, whereas, if they do, it may not be necessary.
You may also consider drafting a new trust in the new state while keeping the old one in tact, especially if a person still has assets or beneficiaries in the old state.
There are three forms of probate in Arizona:
Informal: This is when a valid will is present and has not been challenged. Most probate in Arizona falls under this category. Only certain people may apply for informal probate, including the deceased’s spouse, adult child, siblings, an heir, veteran’s services (if the person is a veteran) or a creditor if over 45 days have passed since death.
Formal: This is when a will’s validity, the choice of representative, or the identification of heirs is being contested. The court will step in to resolve any legal issues, including the interpretation of the will. These types of probate, which may involve one or more hearings, are only partially supervised.
Supervised: This is when an estate is required to go through probate because the court must protect a beneficiary or other third party. The court will oversee every aspect, which means the executor may not do anything with the assets until they have gone to court for approval. This is the most traditional way of conducting probate.
For personal estates less than $75,000, or real estate less than $100,000, there is also a simplified procedure called a “small estate affidavit.” This allows someone to fill out a simple form and hand this document (along with the death certificate) to the department handling the estate. There are some restrictions, such as having to wait a certain period of time or making sure certain costs have been paid, but this allows a person or persons to avoid the costly expenses and time that a formal probate may incur.
To avoid probate altogether, Arizona offers a lot of options. Outside of having a living trust, the testator or trustee may designate someone on their bank accounts as a “Payable-on-death” (POD) recipient. The POD will have access to the account only after the account holder’s death. There are also several “Transfer-on-death” (TOD) options for stocks, bonds, real estate deeds, and vehicle registration.
Arizona is also a community property state, which means that a married couple can designate their property as a right of survivorship, which will allow the surviving spouse to receive the property without probate.
For California Residents with Property in Arizona
Many Californians have property in Arizona. Whether it’s because you own a rental property, have a vacation home, or are looking to retire there, having property in another state can be a strong investment. But what happens when the owner of the secondary property dies?
Though non-real estate assets (such as personal property like furniture) may be probated in the state where the person died, real estate must always be probated in the state for which the property resides (not necessarily where the owner of the property died).
This process is known as Ancillary Probate. In general, the state in which the deceased lived most often, had his or her valid driver’s license, received their mail, and where they voted determines the state of residency, and any property that outside of this state must then go through ancillary probate. . If persons or beneficiaries disagree with the location of the legal domicile, they may petition the court for a hearing.
To understand this concept better, here are a few terms to know:
Foreign Domiciliary: This is when a person dies in another state with property in California.
California Domiciliary: This is when a person dies as a resident of California, but has property in another state. (Here is when ancillary probate must be filed in the state with the property.)
Some states require a second executor who lives in the state with the secondary property to be assigned to handle the distribution of assets.
For Duel Residents
Having a true duel residency is very rare. Usually, a duel residency occurs for tax purposes when someone lives in one state but works in another state for at least half the year. If you have a vacation home where you spend a few months out of the year or you moved from one state to another half-way through the year, you are not a duel resident.
For the most part, a person’s residency has major effects on probate, including property rights, the validation of a will, beneficiary rights, taxes on the estate, jurisdiction on probate proceedings and what state laws govern these proceedings.
If a person is a duel resident, that person’s will should be drafted in accordance with the laws of both states so that when that person dies, the probate process can proceed much smoother.