The Impact of Arizona Senate Bill 1204

Arizona statutes govern the transference of property from a deceased person to beneficiaries. Despite many similarities to this process in other states, Arizona has added its own nuances, and Arizona’s recently passed Senate Bill 1204 (Arizona 53rd Legislature, 2nd Regular Session), became effective on August 3, 2018.  The passage of this bill added some key revisions which impact the Arizona Probate and Trust Codes.

One significant Probate element which did not change was the rule that upon “issuance of a statement of informal probate, the applicant must within 30 days give written information to all heirs and devisees of the admission of the will to probate, together with a copy of the will” (ARS § 14-1304).  Further, an heir or devisee has “four months from the receipt of the information” to commence a formal testacy proceeding or to contest probate.

A few notable changes will have an impact on petitioner notice, no-contest clauses, and reporting by trustees.

Petitioner Notice:

Petitioner shall give notice by publication at least three times prior to hearing date in a newspaper having general circulation in the county of hearing, with the first publication occurring at least 14 days before scheduled hearing (ARS § 14-1401).

Prior to this change, the requirement called for one notice by publication.  Failure to publish in the proper amount and time frame will result in the delay of the hearing, until appropriate notice has been given.

No-Contest Clauses:

SB 1204 has added a section to Arizona Trust Code 14-10113 that makes no-contest clauses “unenforceable if probable cause exists for the contest, proceedings, or actions” brought by a petitioner.  This opens the door for a petitioner to contest a will or trust without penalty as long as there is probable cause.

Trustee Reporting Requirements:

Some of the phrasing in SB 1204 clarifies who is entitled to receive a trustee’s report. Not everyone who receives some form of distribution from a trust is considered a “qualified beneficiary” (ARS § 14-10813), and thus not everyone who receives some form of distribution is entitled to a report.

Furthermore, “A person may not [emphasis added] require the trustee to furnish copies of excerpts from the trust that contain dispositive terms of the trust or provisions on named successor trustees…” without providing a “verified” and “reasonable basis for the request” (ARS § 14-11013), That is to say, a trustee is not obligated to respond to a request to provide a copy of any part of a trust that outlines what, how, or to whom the distributions of that trust will be made, unless that person offers a “verified” and “reasonable” motive for the request.

Most of the changes enacted through SB 1204 will have little impact upon the average will or trust administration, but it’s still a good thing for you (and your attorney) to be fully informed in order to make the process as smooth and inexpensive as possible.