Affidavit of Successions, Proof of Authority for Foreign Domiciliary Personal Representative, and Ancillary Probate
If you are dealing with a probate matter that involves property in multiple states, there are some topics with which you will want to familiarize yourself. These include terms like affidavits of succession to real property, proof of authority for foreign domiciliary personal representative, and the topic of ancillary probate.
Affidavit of Succession to Real Property
Arizona statutes offer an alternative to avoiding probate by using an Affidavit of Succession to Real Property in cases in which the real property value does not exceed a certain value. The estate value must be less than $100,000 minus all the liens and any other encumbrances when the decedent passed away. The value of the property is determined by the full cash value noted in the tax assessor records for the same year the decedent passed. If there is an outstanding loan on the property, the value is taken from the unpaid principal balance due on the loan at the time of death. In situations in which there is more than one owner, the value is based on what percentage of the property the decedent owned.
If the decedent had personal property, a small estate affidavit for personal property can be issued for the value of the personal property provided it is not more than $75,000. Personal property can be items like clothes, jewelry, cash, cars, bank accounts, etc. If there are wages, salary, or some other type of compensation owed to the decedent, the surviving spouse can directly collect this money provided it is not more than $5,000. The surviving spouse must also certify that there is no application for the appointment of a personal representative, the representative was discharged, or it has been more than one year since an estate closing statement was prepared.
Unfortunately, the affidavit, with respect to real property, can not be filed with the courts until six months after the decedent’s death. The individual who signs the small estate affidavit must confirm that all funeral expenses, any last medical costs, and any unsecured debts of the decedent are paid off. There can not be any federal or state estate taxes, either. The signers must declare no other individuals aside from those signing have a right to the property and explain why they are entitled to the real property of the decedent.
In order to apply for an affidavit of succession, you have to show how you are entitled to receive the property. There are several options that apply. These include:
- You are named in the will and can attach a certified copy of the will;
- You are the spouse of the decedent;
- You are the child of the decedent and there is no surviving spouse, or there is a surviving spouse who is not the parent and the decedent held separate or community property;
- There is no surviving spouse or child of the decedent, and you are the parent;
- You are the sibling of the decedent who has no surviving parent, spouse, or child;
- The decedent died without a will and you are the sole heir;
- The decedent left no will, and those with equal or greater right than you have to the property have assigned all their interests in the estate to you, proven by signed documents attached to the affidavit;
- The decedent had a valid will, but those with equal or greater rights to the property have assigned their interests to you, proven by attached documents.
Proof of Authority for Foreign Domiciliary Personal Representative
A Proof of Authority for Foreign Domiciliary Personal Representative deals with a deceased individual who died in a different state. Using Arizona as an example, a person who dies in Arizona may not have any family members, personal representatives, or beneficiaries residing in Arizona. Or, someone who owns a vacation home in Arizona may pass away and reside in another state. A Proof Authority is the legal process that would most likely apply here, and it is where a “foreign” personal representative petitions the probate court in Arizona to exercise his or her foreign powers.
This process relies on several criteria, including that the personal representative was granted executorship powers in the primary probate state. It also requires that there be no pending Arizona probate in existence. The foreign personal representative has to obtain a certified copy confirming his or her legal appointment in the primary probate court state and submit the Arizona probate form “Proof of Authority.” The certification of legal appointment must be less than 60 days old.
Once the form is filed and applicable fees paid, the court may approve the Proof of Authority, which is then recorded and certified in the applicable county recorder’s office where the property is located. Once this is complete, the individual has “domiciliary foreign personal representative” rights and powers, consistent with those given to local personal representatives.
If an application for probate in Arizona is filed, it will terminate the power of the foreign personal representative, unless there is an applicable exception. A.R.S. 14-4206 covers the power of representatives in transition. This section notes that the court may allow the foreign representative to exercise limited powers to preserve the estate if there is an application or petition for local administration of the estate, which would normally terminate the foreign personal representative’s power.
Once the application is approved, the personal representative has several options on how to proceed next. These include recording a Deed of Distribution, which transfers the property to the rightful heir; sell the property and transfer any proceeds to an estate account; or negotiate with a mortgage lender or lienholder for a refinance or assumption of the loan, assuming that it ca not be paid in full already.
In the event that there is not a pending probate in the decedent’s primary state of residence, you cannot file for a Proof of Authority for a Foreign Domiciliary Personal Representative. There are two remaining options that may apply. The first is a petition for an informal probate in Arizona. This is a situation wherein a qualified person petitions the probate court for informal appointment as a personal representative in the associated Arizona county where the property is located. This person is given full authority to deal with the property, but it is important to note that this is the most burdensome and expensive option. The other option is to file for an Affidavit for Succession to Real Property in Arizona. As described above, this is only applicable for transfers of property if the overall value is less than $100,000, and there are no other assets requiring probate in Arizona. While this is a less expensive option, it is important to remember this option is not available earlier than six months after the date of death.
What is Ancillary Probate?
Ancillary probate is when you have two probate proceedings open at the same time in two or more different states. The primary probate would take place in the state of the decedent’s death, most likely Arizona in this case. The court in this state will determine the validity of the will and confirm the naming of the executor of the decedent’s will. The one thing the state court cannot do is to issue orders related to property outside of its jurisdiction.
If the decedent has property in another state, an ancillary probate is likely necessary. It is considered the secondary probate, and its sole purpose is to handle probate for the out-of-state property. Ancillary probate is commenced after the primary probate proceedings are initiated.
Ancillary probate processes vary by state, but it is usually a shortened process when compared to the primary probate. Some states will give the executor a bypass so they do not have to request letters of authorizations after receiving them from the primary probate state. This means that an individual files the letters and a copy of the will with the probate court in order to proceed, and this grants the foreign executor similar rights to those he or she has in the primary state.
It is important to understand what assets are subject to probate in the first place as well. Probated assets are ones that are titled in the decedent’s sole name at death. Non-probate assets include the following:
- Joint and Survivor tenancies where there is a surviving tenant left;
- Assets that are placed in a trust;
- Assets that have a named at-death beneficiary or beneficiaries who are surviving (retirement accounts, life insurance contracts, etc.)
One of the biggest questions on ancillary probate is whether the surviving heirs need to travel to Arizona to handle distribution of the assets. In general, there is no need to travel to the state unless there is pending litigation. Another common question is how to avoid ancillary probate. The easiest way is by planning ahead and transferring all out-of-state property prior to death into a joint tenancy with right of survivorship. You can also record a transfer-on-death deed in the state where the property is located, provided that state allows that type of deed.
Not surprisingly, there are some downsides to ancillary probate, with the biggest one being the additional expenses, especially if you have to hire another lawyer who can practice law in the secondary state with assets. The executor is likely going to wind up paying more in court costs and filing fees, and ancillary probate can mean a longer waiting period for beneficiaries to get their inherited assets.
Comparing the Processes
To breakdown each of these processes and more clearly understand the differences, ancillary probate is the secondary probate process itself. It takes place in another state where the decedent had assets. If you don’t wish to open an ancillary probate in the state where the property is located, the executor could choose to have the proof of authority papers prepared. If there is no probate opened in either state, then the heirs could choose to have an Affidavit of Succession to Real Property prepared if and only if the property in question is valued under $100,000.
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