Arizona: Distribution of Remaining Estate Funds to Children After Taxes and Claims | Arizona Probate

Detailed Answer: How Arizona estates distribute remaining funds to the decedent’s children after taxes, claims, and expenses are settled

When an estate has paid taxes, creditor claims, and administration costs, the next step is to distribute the remaining assets (the “residue”) to the heirs or beneficiaries. In Arizona this process depends on whether the decedent left a valid will or died intestate (without a will). The general probate steps below explain how the personal representative (executor or administrator) gets the court order or authority needed to transfer cash, bank accounts, securities, and other assets to the decedent’s children.

Step-by-step process

Confirm authority and opening of probate. The personal representative named in the will (or appointed by the court if there is no will) has legal authority to administer the estate. Probate procedures and the representative’s duties are governed by Arizona probate law; see Arizona Revised Statutes, Title 14 (Trusts and Estates) for details: https://www.azleg.gov/arsDetail/?title=14.
Inventory and appraisal. The representative inventories estate assets and obtains appraisals when required. The inventory shows what remains available for distribution after expenses and claims.
Notify creditors and pay valid claims, taxes, and expenses. The representative must identify and pay valid creditor claims, estate administration costs, funeral expenses, and any estate or income taxes before distribution. Arizona statutes and court rules set the procedure and deadlines for creditor claims. The Arizona Courts probate pages provide guidance on notices and timelines: https://www.azcourts.gov/probate.
Prepare a proposed final accounting or petition for distribution. After settling claims and taxes, the representative prepares a final accounting or a petition asking the court to approve distribution of the remaining estate. The petition explains how the remaining assets should be allocated among beneficiaries or heirs.
Court approval or nonjudicial distribution. If the estate required formal probate, the court typically reviews the final accounting or petition and enters an order approving distribution. In some small or informal administrations, distribution may occur under simplified procedures. For statutory framework on administration and distribution procedures, see Title 14, Chapter 3 of the Arizona Revised Statutes: https://www.azleg.gov/arsDetail/?title=14&chapter=3.
Distribution according to the will or Arizona intestacy laws.
- If there is a valid will: distribute the residue exactly as the will directs. The personal representative follows the will and the court’s distribution order.
- If there is no valid will: Arizona’s intestate succession rules determine the children’s shares. Arizona law addresses descent and distribution; see Title 14, Chapter 2: https://www.azleg.gov/arsDetail/?title=14&chapter=2. Generally, children (and the descendants of a predeceased child) take under the statutory rules if no spouse or other closer heir has a superior claim.
Transfer assets to the children. Once the court signs the distribution order (or after any required waiting periods and filings), the representative transfers funds or re-titles assets to the children according to the order. For cash, the estate’s bank issues checks or electronic transfers. For property, deeds or account beneficiary designations are updated as required.
Close the estate. After distribution, the representative files receipts and a final report or account with the court and asks the court to close the estate.

Key rules that commonly affect children’s shares

Representation by descendants: If a child of the decedent died before the decedent but left children (grandchildren of the decedent), those descendants typically inherit that deceased child’s share by representation. Check Title 14, Chapter 2 for details on who receives shares when heirs predecease the decedent: https://www.azleg.gov/arsDetail/?title=14&chapter=2.
Spouse versus children: If the decedent is survived by a spouse and children, Arizona law determines how to split the estate between spouse and children depending on the facts (community property, separate property, and whether children are also the spouse’s descendants). See Title 14 for the rules that govern these distinctions: https://www.azleg.gov/arsDetail/?title=14.
Nonprobate assets and beneficiary designations: Assets that pass outside probate (life insurance, retirement accounts, payable-on-death bank accounts) go directly to named beneficiaries and are not part of the probate residue unless the estate is the designated beneficiary.

Common practical issues and how they are handled

Disagreements between children: If children dispute the distribution, the personal representative should seek court instructions. The court may resolve contested accountings, will contests, or claims of improper distribution.
Insufficient liquid funds: If the estate lacks cash to pay heirs their shares, the representative may need to sell assets or obtain court permission for partial distributions.
Minor beneficiaries: If a beneficiary is a minor, the estate may use guardianship, conservatorship, or a court-approved trust to manage the property until the minor reaches the age of majority.

Timeline

Exact timing varies. Simple estates with no disputes can distribute funds in a few months after claims and taxes clear. Contested estates, complex assets, or tax issues can extend the process to a year or longer. Use the Arizona Courts resources to estimate local timelines: https://www.azcourts.gov/probate.

What you should prepare or bring when you expect to receive a distribution

Proof of identity (government ID).
Contact information and proof of relationship (birth certificate, if required).
Tax ID or Social Security number for reporting purposes.
Bank account information for electronic transfers.

When to consult an attorney

Contact an attorney if you face contested distributions, unclear beneficiary designations, disputes about creditor claims, potential estate tax issues, or complex assets (business interests, out-of-state property, or trusts). A lawyer can file required petitions, represent your interests in court, and help interpret Arizona statutes that affect heirs’ shares.

Disclaimer

This article provides general information about Arizona probate and distribution to heirs. It is not legal advice and does not create an attorney-client relationship. For advice tailored to your situation, consult a licensed Arizona attorney.

Helpful Hints

Start by locating the will (if one exists) and the name of the personal representative.
Ask the personal representative for a copy of the inventory and the proposed final distribution before funds move.
Check whether any assets pass outside probate (beneficiary designations) because those do not go through the distribution process described here.
If you expect a distribution, confirm how the representative will pay (check versus electronic transfer) and whether tax withholding applies to certain assets.
Keep records of all communications and documents you receive from the estate administrator or the court.
Use Arizona Revised Statutes Title 14 and the Arizona Courts probate resources for authoritative procedural guidance: https://www.azleg.gov/arsDetail/?title=14, https://www.azcourts.gov/probate.