Category Archives: Arizona

Is An Arizona Beneficiary Deed Right For You?

Arizona is one of the states that authorizes a Beneficiary Deed to convey property at death.  The law is found at Arizona Revised Statutes, Section 33-405.  How does it work?  Essentially, the deed allows the grantors, after all grantors are deceased, to convey title to real property in Arizona to named beneficiaries without having to go through a Will or Trust.  The process is completed at the county’s recorder office, not a probate court or by a successor trustee of a trust. Any beneficiary deed must be recorded in the county of the location of the real property to be effective.  

The definition by statute is: “A deed that conveys an interest in real property, including any debt secured by a lien on real property, to a grantee beneficiary designated by the owner and that expressly states that the deed is effective on the death of the owner transfers the interest to the designated grantee beneficiary effective on the death of the owner subject to all conveyances, assignments, contracts, mortgages, deeds of trust, liens, security pledges and other encumbrances made by the owner or to which the owner was subject during the owner’s lifetime.”

If the title to real property includes the right of survivorship, the deed must state that it becomes effective to convey title upon the death of the last survivor. A beneficiary deed may be used to transfer an interest in real property to the trustee of a trust — even if the trust is revocable.  

The statute states that a beneficiary deed may designate multiple grantees who take title as joint tenants with right of survivorship, tenants in common, a husband and wife as community property or as community property with right of survivorship, or any other tenancy that is valid under the laws of this state.  Unless the beneficiary deed provides otherwise, the interest in real property conveyed by a beneficiary deed is the separate property of the named grantee beneficiary and is not community property.  Moreover, a beneficiary deed may designate a successor grantee beneficiary and express the condition that must occur to allow the successor grantee to take title.

A beneficiary deed may be revoked at any time by the owner or, if there is more than one owner, by any of the owners who executed the beneficiary deed.  The revocation must be recorded to be effective.

Asset Protection in Arizona

Arizona allows various exemptions, protected by Arizona law, from most or all creditors after a judgment or bankruptcy filing.  These exemptions are different from corporate or limited liability company protection from creditors after a judgment or bankruptcy filing.

Some exemptions under Arizona law are:

  • Homestead Exemption – Up to $250,000 of equity in a primary residence either by a single person or a married couple – not $250,000 each if married. The exemption is automatic.
  • Household Goods – Household goods up to $6,000 in value.  This includes furniture and furnishings, appliances, and personal items.   
  • Personal Property – $300 cash, clothing up to $500, musical instruments up to $400, pets, a wedding ring up to $2,000, books up to $250, a bicycle, a firearm or a computer, all up to $1,000 each, a car up to $6,000 and a wheelchair.  Also an exemption of up to $5,000 for tools of the trade.           

Life Insurance

What about life insurance? Yes, as long as it is a whole life policy.  During the policy owner’s life the cash value of the insurance policy is fully protected after the policy has been in force for two years.  A.R.S. 33-1126(A) (6).  The policy must name a surviving spouse, child, parent, brother or sister, or any other dependent family member as beneficiary.  The death benefit is also fully protected from the insured’s creditors in Arizona.  A.R.S. 20-1131(A).  But, if the estate of the insured is insolvent, the surviving spouse and children are given up to $20,000 of claim-free insurance proceeds only.  A.R.S. 33-1126(A)(1).    

Annuity contracts are treated much the same way as life insurance. 

IRA and Deferred Compensation Accounts

Federal law protects the assets in a qualified retirement plan.  This includes all 401(k), 403(b), and TSA accounts.  Arizona law also protects assets in an Individual Retirement Arrangement (“IRA”) by statute.  A.R.S. 33-1126(B)  Since this is the case, putting an IRA into a trust is unnecessary if the objective is to protect the IRA from creditors. 
Under Arizona law, an inherited IRA has additional protection in the context of bankruptcy court.  Under various cases in Arizona and the US Supreme Court, (In re Thiem, Bktcy Ct AZ 1/19/2011, 107 AFTR 2d 2011-529), partly overruled in Clark v. Rameker (June 12, 2014), an Arizona statute appears to protect an Arizona resident’s inherited IRA assets from bankruptcy creditors.  Only Arizona, Alaska, Florida, Idaho, Missouri, Ohio, North Carolina, and Texas offer this extended protection.

Is Your Will Valid Under Arizona Law?

Recently, the law has changed in Arizona as to the validity of a Will. Arizona also allows electronic Wills under certain circumstances.  

For any Will executed on or after October 1, 2019, unless it is self-proved as prescribed in Arizona Revised Statutes Section 14-2504 or 14-2519, a person may not act as a witness to a Will if that person is a devisee under that Will or is related by blood, marriage or adoption to a devisee under that Will.  “Devisee” means a person who is designated in the Will to receive a devise (distribution) or who is a beneficiary of a trust that is designated in the Will to receive a devise.

A Will is self-proved if both the will maker and the witnesses have signed after proper attestations — dictated by statute — and had their signatures notarized. 

Arizona requires two witnesses.  Who is competent to be a witness? ARS Section 14-2505 says that a person who is generally competent to be a witness may act as a witness to a will.  Who is that?  A person at least 18 years of age and of sound mind is competent to be a witness.  

As to Electronic Wills:

In addition to the requirements of section 14-2504, to be self-proved, an electronic Will must meet all the following requirements:

1. Contain the electronic signature and electronic seal of a notary public placed on the Will in accordance with applicable law.  

2. Designate a qualified custodian to maintain custody of the electronic will.

3. Before being offered for probate or being reduced to a certified paper original, be under the exclusive control of a qualified custodian at all times.

Also, the journal to record the notary act must be in a tamper-evident electronic journal; no recording in a paper journal.  The electronic journal and the audio-visual recording are public records upon proper request to the notary.


Arizona is a community property state so property acquired by a married couple is presumed to be community property unless legally specified otherwise. Title may be held as “sole and separate.” If a married person acquires title as sole and separate, his or her spouse must execute a disclaimer deed to avoid the presumption of community property. Parties may choose to hold title in the name of an entity, such as a corporation; limited liability company; a partnership, or a trust. Following are the most common examples of holding title.  How title is held has significant consequences so please consult a professional for further information.


Requires a valid marriage between two persons.

Each spouse holds an undivided one-half interest in the estate.

One spouse cannot partition (divide) the property by selling his or her interest.

Requires signatures of both spouses to convey or encumber.

Each spouse can devise (will) one-half of the community property.

Upon death the estate of the decedent must go through probate, affidavit or adjudication.

Both halves of the community property are entitled to a “stepped up”* tax basis as of the date of death.


Parties need not be married; may be many joint tenants.

Each joint tenant holds an equal and undivided interest in the estate, unity of interest.

One joint tenant can partition (divide) the property by selling his or her interest.

Requires signatures of all joint tenants to convey or encumber the whole.

Estate passes to surviving joint tenants outside of probate.

No court action required to clear title upon the death of joint tenant(s).

Deceased tenant’s share is entitled to a “stepped up”* tax basis as of the date of death.


Requires a valid marriage between two persons.

Each spouse holds an undivided one-half interest in the estate.

One spouse cannot partition (divide) the property by selling his or her interest.

Requires signatures of both spouses to convey or encumber.

Estate passes to the surviving spouse outside of probate.

No court action required to clear title upon the first death.

Both halves of the community property are entitled to a “stepped up”* tax basis.


Parties need not be married; may be many tenants in common.

Each tenant in common holds an undivided fractional interest in the estate. Can be disproportionate, such as 20% and 80%; 60% and 40%; etc.

Each tenant’s share can be conveyed, encumbered (mortgaged) or devised (willed) to a third party.

Requires signatures of all tenants to convey or encumber the whole.

Upon death the tenant’s proportionate share passes to his or her heirs by will, trust or intestacy.

Upon death the decedent’s share must go through probate, affidavit or adjudication.

Each share has its own tax basis.

*Stepped up tax basis. Under this rule, an heir receives a basis in inherited property equal to its date-of-death value. If your uncle bought XYZ stock in 1940 for $500 and it’s worth $5 million at his death, the basis is stepped up to $5 million in the hands of his heirs and all of that gain escapes federal income tax forever.

This rule applies to inherited property that’s includible in the deceased’s gross estate and to property inherited from foreign persons who aren’t subject to U.S. estate tax. It also applies to the inherited portion of property owned by an inheriting taxpayer jointly with the deceased, but not the portion of jointly held property that the inheriting taxpayer owned before inheritance. This rule does not apply to reinvestments of estate assets by fiduciaries.


Under Arizona law, there is a statute (law) that deals with the problem of a missing beneficiary. Arizona Revised Statute §14-3914 states what is to be done if an heir, a beneficiary where there is no Will, or a devisee, a beneficiary where there is a Will, cannot be found. 

What does this statute say? If such a person cannot be found, the personal representative (executor) of the estate can distribute the share of the missing person to his or her conservator, if there is one.  Otherwise, the cash must be deposited to the Arizona Department of Revenue into the permanent school fund.  In short, the government gets it. 

If a person later appears and claims to be the missing heir or devisee, that person  makes a claim to the escheated property.  “Escheated” is the legal term for reversion of property to the state or some agency of the state.  

If the person shows up within seven (7) years, the person files a claim to the money with the Arizona Department of Revenue.  Thereafter, the department can hold a hearing and “receive evidence,” if they like.  If there is a hearing, the department issues a decision which is in the public record.  If the claim is granted, the department issues payment immediately.  If the claim is denied, the aggrieved party can then file an action in Superior Court to adjudicate the claim in court.

New Laws in Arizona 2018

The start of 2018 means new laws taking effect in Arizona.

Employees are happy about an increase in the minimum wage, but some business owners are worried about now having to pay their workers $10.50 an hour. “It costs me approximately four thousand dollars a month employing twelve to fifteen people, that’s a big hit for a small business owner to take,” said Frank Silverman of Midtown Tavern.

After being signed into law by President Donald Trump a new tax law is set to take effect. The law doubles the standard deduction, doubles the child tax credit, and gets rid of the nearly $4,000 personal exemption. However, none of these will have an impact on your next tax return. None of the new tax laws affect the 2017 taxes.

Looking ahead, there’s a new proposal emerging for the 2018 ballot allowing the recreational use of marijuana. The initiative, sponsored by a medical marijuana dispensary (similar to one you can see if you Visit this website), would expand the list of conditions for which a doctor could recommend a patient be allowed to use the drug. Even after a doctors recommendation, there are still some conditions to meet before you are eligible for a medical marijuana card. Read more here to see if you could qualify for one. This initiative will undoubtedly be backed by many, as it would make it easier and cheaper for patients to get marijuana, including allowing a large percentage of them to grow their own plants as long as they have the correct marijuana insurance.

Proponents, the operators of the Independent Wellness Center, a medical marijuana dispensary in Apache Junction, need 150,642 valid signatures on petitions by July 5, 2018, to put the measure. However if you’re looking for a wellness center for you to get your medical marijuana from, look into dispensary Lansing MI and other locations.

Paid Sick Leave Is Now The Law In AZ

Arizona’s new law mandating paid sick leave starts July 1. Businesses and non-profit groups could face penalties for failing to keep records, post notices and could incur damages for failing to provide paid sick time. Employers who retaliate against workers exercising their rights could face fines of at least $150 per day.

The law mandating as many as 40 hours of paid sick leave, which was approved by voters in November of 2016 that also raised the state’s minimum wage, applies to almost all businesses and non-profits with at least one Arizona employee including entities not headquartered in the state. The only exceptions are those employed by Arizona’s state or federal government and sole proprietors. So, whether full-time or part-time, temporary or seasonal, all will receive paid sick time. They will be able to use this benefit for a variety of reasons. There are a number of reasons where an employee may require sick leave. One of the reasons could be that an employee experienced an injury whilst working, meaning that they needed some time off. Whilst they probably should be entitled to sick pay, the employer should also try and organize some worker’s compensation to help the employee return to work easily. To learn more about this compensation, employers may want to visit FFVA Mutual to find out more.

The minimum requirements are 24 hours of paid sick time off annually for businesses with 14 or fewer workers, or 40 hours off for entities with 15 or more people. Employees are entitled to receive paid sick-time off; independent contractors are not. The general rule is that if you issue a W-2 to a worker, that person is an employee entitled to the benefit.

The law allows paid leave for various reasons besides sickness or injury such as domestic violence, sexual abuse, stalking or the closing of a child’s school owing to a public health emergency. Additionally, reasons include taking time off to meet with an attorney, arranging shelter services or securing safe housing, as well as issues on behalf of family members. The definition of family members is quite broad including siblings, grandparents, in-laws and others. Significantly, an employer can request proof or documentation only after a worker has been absent for three days in a row. And, when proof is required, it can come in a variety of forms such as a doctor’s note, a police report, a letter from an attorney or simply a worker’s own statement that he or she needed time off. Employers generally will be required to grant the time off. Penalties and damages await companies that ignore the new law.


How To Change an Irrevocable Trust – Decanting

Just like you decant a fine wine from a wine bottle into a new one, you can decant the assets of a not-so-fine irrevocable trust into a new trust. A revocable trust is, by definition, subject to revocation or amendment, so no need there. Decanting means changing, updating and modernizing an irrevocable trust.

The trust agreement itself may allow this, but in Arizona, the law addressing decanting is found at Arizona Revised Statutes 14-10819, “Trustee’s special power to appoint to other trust.” Essentially, it states that unless the terms of the instrument expressly provide otherwise, a trustee who has the discretion to make distributions for the benefit of a beneficiary of the trust may exercise — without prior court approval — that discretion by appointing the estate trust in favor of a trustee of another trust if the exercise of this discretion:

  1. Does not reduce any fixed nondiscretionary income payment to a beneficiary.
  2. Does not alter any nondiscretionary annuity or unitrust payment to a beneficiary.
  3. Is in favor of the beneficiaries of the trust.
  4. Results in any standard applicable for distributions from the trust being the same or more restrictive standard applicable for distributions from the recipient trust when the trustee exercising the power is a possible beneficiary under the standard.
  5. Does not adversely affect the tax treatment of the trust, the trustee, the settlor (the original trustmaker) or the beneficiaries.

Typical reasons to decant include correcting ambiguities or drafting errors, changing the trust’s situs to a more favorable place, splitting up or combining trusts to achieve administrative cost savings, or broadening a trustee’s powers under the new trust. This would include the power to distribute income and principal to beneficiaries resulting in certain tax savings. A trust can also be decanted from a settlor trust to a non-settlor trust or vice versa, reversing the responsibility of who pays income taxes.

Arizona Revenge Porn Law Unconstitutional

U.S. District Judge Susan R. Bolton ordered Arizona state prosecutors last week to stop enforcing Arizona’s so-called “revenge porn” law. Whilst the intent was to keep sites like free from content uploaded without consent, her decree came as she approved the settlement in the case of Antigone Books v. Brnovich which challenged the law as unconstitutional.

The revenge porn law, called the “Unlawful Distribution of Images” statute, was signed by former Governor Jan Brewer last year and made it a felony “to intentionally disclose, display, distribute, publish, advertise or offer a photograph, videotape, film or digital recording of another person in a state of nudity or engaged in specific sexual activities if the person knows or should have known that the depicted person has not consented to the disclosure.”

Those who sponsored it were trying to prevent nonconsensual pornography-particularly nude images posted on the internet by an angry ex-lover, commonly called “revenge porn.” On websites like this type of content can be found but there is also plenty of legal consensual adult content on here and its important to differentiate. But a group of Arizona booksellers, publishing companies, newspapers, librarians, and photographers sued the state arguing that the language was “an unconstitutionally overbroad and viewpoint-based restriction on protected speech.”

Whilst the intent is to ensure that sites like remain free from such unwanted material being uploaded, Arizona’s revenge porn law would make it a felony to publish certain educational materials about breastfeeding, or newsworthy photographs like those taken at the Abu Ghraib prison. It “could have led to the conviction of someone posting a nude photo with no intent to harm the person depicted,” notes the ACLU, which served as co-counsel for the plaintiffs.

“More than half of the states have passed some form of revenge porn law, and certainly not all of them are unconstitutional” Lee Rowland, senior staff attorney for the ACLU, told the New Times magazine of Phoenix, Arizona. “But because they tend to regulate free speech, we at the ACLU look at them closely.” The law may be revised and resubmitted by its sponsors. It won’t be illegal though to upload homemade porn movies as long as all who participate give consent, you can see adult movies like these on websites like