Disclaimer: This article is for educational purposes only. It does not constitute legal advice.
Detailed Answer
When a life insurance policy lacks a valid beneficiary designation, the insurance company will generally pay the proceeds to the decedent’s probate estate. Under Arizona law, those proceeds become part of the probate assets. You must open probate or use a small-estate process to enforce distribution.
1. Insurance Proceeds Pass to the Estate
Arizona Revised Statutes § 14-2804 states that a death benefit payable to a decedent’s estate passes to heirs as if the decedent died intestate. See Ariz. Rev. Stat. § 14-2804. This means the insurer pays the full policy amount into probate.
2. Open Probate or Use Small-Estate Affidavit
If the total estate value exceeds $75,000, file a formal probate petition in the superior court of the decedent’s county. Provide the death certificate, policy documents, and an inventory listing the insurance proceeds. The court appoints a personal representative (PR) who gathers assets, pays valid debts, and distributes the remainder.
For estates under $75,000, you may file a small-estate affidavit under Ariz. Rev. Stat. § 14-3971. After a waiting period, the affidavit allows collection of assets, including insurance proceeds, without formal probate.
3. Apply Intestate Succession Rules
When no will exists, Arizona’s intestate succession law determines who inherits. Arizona Revised Statutes § 14-2102 provides the distribution order: spouse, children, parents, siblings, and more. Review the schedule at Ariz. Rev. Stat. § 14-2102. The PR must distribute the insurance proceeds according to these rules.
4. Seek a Court Order if the Insurer Delays Payment
If the insurer refuses or delays payment, the personal representative can petition the court for an order directing payment. Provide proof of policy ownership, mailing records of beneficiary-designation forms, and a certified death certificate. The court’s order binds the insurer to release funds into the probate estate.
Helpful Hints
- Confirm beneficiary forms: Review the policy’s file for change-of-beneficiary forms. Under Ariz. Rev. Stat. § 20-158, insurers must record beneficiary-designation changes in writing.
- Act promptly: File for probate within nine months to avoid creditor-claim issues.
- Gather documentation: Keep original policy, death certificate, and any written beneficiary requests.
- Consult court rules: Each county may have local probate rules on document format and filing fees.
- Track creditor claims: Publish notice to creditors as required to clear liens before distribution.