Arizona Estate Planning Considerations
Community Property State
There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska is an opt-in community property state that gives both parties the option to make their property community property.
Domicile is a person’s legal permanent residence and may not be where they currently live. For those in the military, people who have homes in several states, or those who have moved frequently, figuring out which state is their proper domicile is vital.
IRS Publication 555 provides guidance and states that generally, community property is property:
- That you, your spouse, or both acquire during your marriage while you and your spouse are domiciled in a community property state.
- That you and your spouse agreed to convert from separate to community property.
- That cannot be identified as separate property.
Guidance is also given regarding what is considered separate property:
- Property that you or your spouse owned separately before your marriage.
- Money earned while domiciled in a noncommunity property state.
- Property that you or your spouse received separately as a gift or inheritance during your marriage.
- Property that you or your spouse bought with separate funds or acquired in exchange for the separate property during your marriage.
- Property that you and your spouse converted from community property to separate property through an agreement valid under state law.
- The part of property bought with separate funds was purchased with community funds and amount with separate funds.
A premarital agreement is an agreement that may change the result of the property division.
Last Will and Testament
The minimum age of a person competent to make a will is 18. The number of witnesses necessary to execute a will is two.
The custodial arrangement terminates when:
- The minor child reaches age 21 for custodial transfers made by irrevocable lifetime gift, will, or trust, or exercise of a power of appointment.
- The minor child reaches age 18 regarding other custodial transfers.
- The minor child dies.
Dying without a Last Will, the Arizona laws of Intestacy
The estate goes to the surviving spouse, as follows:
- If there are no surviving descendants, —100% of the estate
- If all descendants are also descendants of the spouse, —100%
- If there are surviving descendants, at least one of whom is not also a descendant of the spouse, —50% of the separate property and none of the decedent’s portion of the community property
If there is no surviving spouse, or if a part of the estate does not go to the spouse:
100% (or applicable portion) to descendants, by representation (see ARS §14‐2106)
If there is no surviving spouse or descendant:
100% to surviving parent or parents equally
If there is no surviving spouse, descendant, or parent:
100% to descendants of parents, by representation (see ARS §14‐2106)
If none of the above:
Intestacy laws outline further distribution steps to the level of grandparents and related individuals. See ARS §14‐2103. If no legally described recipient can be found, estate assets go to the state of Arizona.
Learn about the finer points of Arizona’s living will laws in the box below.
Code Section 36-3201 et seq. Living Wills and Health Care Directives
Specific Powers, Life-Prolonging Acts
Does not include comfort care or alleviation of pain but may consist of life-sustaining treatment artificially delaying the moment of death, CPR, drugs, electric shock, artificial breathing, artificially administered food, and fluids.
Legal Requirements for Valid Living Will
(1) Adult; (2) in writing; (3) language indicating intent to create a living will; (4) dated; (5) signed; (6) witnessed by at least one adult or a notary public
Revocation of Living Will
A person may revoke a health care directive or disqualify a surrogate by (1) written revocation; (2) orally notifying the surrogate or health care provider; (3) making a new health care directive; (4) any other act demonstrating specific intent to revoke
Validity from State-to-State
Health care directive prepared in another state is valid in this state if it was valid where and at the time it was adopted to the extent it does not conflict with the criminal laws of Arizona.
If Physician Unwilling to Follow Living Will
A physician must effect prompt transfer to a physician willing to comply.
Immunity for Attending Physician
Health care provider making good-faith decisions in reliance on apparently genuine health care directive or decision of a surrogate or living will is immune from criminal, civil, and professional discipline for that reliance (unless negligent)
Arizona does not impose an inheritance tax.
Credit Estate Tax
Arizona does not impose an estate tax.
Arizona does not impose a GST tax.
Arizona does not impose a gift tax.