No one likes to deal with messy probate, and it can often be a nightmare when things are not set up properly. In the state of Arizona especially we often see common mistakes when it comes to real estate!
Here is a real life example of a situation and something that is commonly seen.
We had a client that was a husband and wife that took title to their real property as joint tenants.
Notice that they were not joint tenants with right of survivorship, and they were not community property with right of survivorship. When one of the spouses passed away this caused trouble for the surviving spouse.
Arizona law states that in order for property to be passed the survivor by operation of law it has to have the right of survivorship language.
Even though this couple had a trust setup they had never transferred theri real property into the trust.
When the remaining survivor wanted to refinance the home, because there was no right of survivorship language and the real property was not in the trust, the title company informed the spouse that they did not have the ability to do so.
The reason they didn’t have the ability to do so was that more than 50% of the property wasn’t owned by them, the other 50% was owned by the deceased spouse and their estate.
In this circumstance we were luckily because a pour over will had also been setup. The pour over will allowed us to file for formal probate and be able to fairly easily collect and transfer that 50% interest into the trust. As a trustee of the trust the surviving spouse was then able to go ahead and refinance the home.
When a spouse passes it is important to speak to an estate administrative lawyer to find out what needs to be done if anything. Speaking to a lawyer as soon as possible helps mitigate mistakes!
Feel free to comment down below and let us know what questions you have and how we might be able to help you! And don’t forget to share this post with a loved one to help them prevent a mistake like the example shared today!