Transfer of property in Arizona, either real property or personal property, upon a person’s death may be accomplished by various methods:
Beneficiary Deeds – Legislation passed during 2001 provides a method of conveying a property interest upon a person’s death (Laws 2001, Chapter 112). This method allows an owner to automatically transfer real property upon his or her death to a designated beneficiary without a probate proceeding. The transfer on death deed differs from other real estate deeds because it does not grant any right, title or interest in the property until the death of the property owner. No probate is required, but proper documentation by the transferee may be necessary.
Community Property with Right of Survivorship – Community property with right of survivorship is another method of co-ownership, similar to joint tenancy but is only allowed for married persons. This method of holding title allows a married couple to own property with a right of survivorship and has a potential added tax benefit arising from the marital relationship. No formal probate is usually required, but proper documentation by the transferee may be necessary to clear the title to the property.
Joint Tenancy with Right of Survivorship – Joint tenancy with right of survivorship is a method of co-ownership that gives the surviving tenant a sole interest in the property upon the decedent’s death. No probate is required, but proper documentation by the transferee may be necessary to clear the title to the property.
“Living” Trust – A “living” trust is a document, revocable at any time before death by the person making it (“Grantor” or “Settlor” or “Trustor”), which provides management of an individual’s assets during lifetime and directs the distribution of assets upon death. The Grantor may also be the trustee and maintain control of assets even though they belong to the trust. To avoid the need for probate, the title to the assets that the Grantor owns personally must be actually transferred to the trust. No probate is required, but proper documentation by the transferee may be necessary to clear title to the assets.
Payable on Death (POD) Bank Accounts & Transfer on Death (TOD) Security Accounts – The account owner names a beneficiary who has an automatic right to the account balance on the death of the owner without going through the probate process. Until then, the beneficiary has no rights in the account, since the beneficiary can be changed or the account may be closed. Arizona has also adopted a Transfer on Death law pertaining to shares of stock and bonds that works the same as the payable on death arrangement does for bank accounts (Laws 1994, Chapter 290). No probate is required, but proper documentation by the transferee may be necessary.
Will – A Will is a written document that directs the disposition of a person’s property after his or her death. A Will is an instruction sheet that determines what happens to the property of the person who died (“decedent”). Probate is the legal proceeding by which a decedent’s property is distributed to heirs designated by law if he or she dies without a Will, or to certain beneficiaries designated by the decedent if he or she dies with a Will. Legislation passed in 2001 modifies Arizona probate law to improve consistency with the Uniform Probate Code (Laws 2001, Chapter 44).