Arizona: What Happens to Leftover Sale Proceeds When Someone Dies Without a Will

Detailed Answer

When a person dies without a will in Arizona, money left over from the sale of that person’s property generally becomes part of the decedent’s estate and must be distributed according to Arizona’s intestate succession and probate rules. Whether those sale proceeds immediately pass to a surviving spouse or other person depends on how the asset was owned and how the proceeds are held at death.

Key points:

• If the proceeds are non‑probate (for example, held in a joint account with right of survivorship or paid to a named beneficiary or placed in a trust), they usually pass outside probate to the joint owner or beneficiary.
• If the proceeds are held in escrow or remain in the decedent’s name (bank account, title company, attorney trust account, etc.) when the person dies, they are estate assets and the decedent’s personal representative (or an administrator appointed by the court if there is no will) must collect and distribute them.
• Arizona law governs who inherits when there is no will. Intestate succession rules decide the heirs (spouse, children, parents, siblings, etc.). These rules are found in Arizona’s probate statutes: Title 14 of the Arizona Revised Statutes (intestate succession is in the intestacy provisions). See Arizona Revised Statutes, Title 14 (Probate) for the governing law: https://www.azleg.gov/arsDetail/?title=14
• Arizona is a community property state. That means property acquired during marriage may be community property and a surviving spouse may already own a share of the asset or proceeds by operation of community‑property rules. Ownership characterization (community vs. separate property) affects how much goes through probate and how much goes directly to the spouse.

Typical practical flow

1. Determine whether the proceeds are probate or non‑probate. Review title to the sold asset, bank/escrow records, beneficiary/payable‑on‑death designations, and joint‑account documents.
2. If non‑probate, the joint owner or beneficiary should provide the death certificate and ownership documents to the bank or escrow holder to claim the funds.
3. If probate is required, an heir (or a creditor or any interested person) can open an intestate probate case in the county where the decedent lived. The court will appoint an administrator to marshal assets (including sale proceeds), pay debts and funeral costs, and distribute the remainder to heirs under Arizona’s intestacy rules (Title 14 of the Arizona Revised Statutes: https://www.azleg.gov/arsDetail/?title=14).
4. Small‑estate procedures or transfer affidavits may allow heirs to collect certain assets without full probate in lower‑value situations. Arizona courts provide information on small‑estate procedures and probate steps: https://www.azcourts.gov/selfservice/Probate
5. Escrow or title companies will usually require either (a) a personal representative’s instruction, (b) a court order, or (c) the appropriate small‑estate documents before they will release funds.

Common scenarios

Here are brief examples of how things often play out:

• Proceeds in a joint bank account with right of survivorship: the surviving joint owner usually becomes sole owner at death and can access the funds by showing the death certificate and account paperwork.
• Proceeds paid to an account in the decedent’s name: those funds typically belong to the estate and must be collected by an appointed personal representative or via small‑estate procedures.
• Proceeds from sale of community property: the surviving spouse may already own the deceased spouse’s community half, but the deceased spouse’s separate interest (if any) passes by intestacy.

Where to look in Arizona law

Arizona’s probate and intestacy rules are in Title 14 of the Arizona Revised Statutes. For an overview of probate and small‑estate procedures, see Arizona Courts’ probate self‑help pages: https://www.azcourts.gov/selfservice/Probate. For the statutory framework, start at the Arizona Legislature’s Title 14 pages: https://www.azleg.gov/arsDetail/?title=14

Important: This is a general explanation only. Specific outcomes depend on the facts: property titles, account agreements, whether the decedent had a trust, community property issues, outstanding debts, and the size of the estate.

Disclaimer: This article provides general information about Arizona law and is not legal advice. For guidance about a particular situation, contact a licensed Arizona probate attorney or the local probate court.

Helpful Hints

• Do not spend or move funds that are clearly estate property until authority (personal representative appointment or court order) is established.
• Obtain multiple certified copies of the death certificate—you will need them to release funds and close accounts.
• Check account title and beneficiary designations first. That determines whether funds avoid probate.
• If the estate looks small, ask the county probate clerk about small‑estate affidavits and simplified procedures before opening full probate. Arizona Courts’ self‑help probate pages: https://www.azcourts.gov/selfservice/Probate
• If you’re an heir and cannot reach agreement with others, or if a financial institution refuses to release funds, consider consulting a probate attorney early to avoid delays or claims of improper distribution.
• Keep clear records: escrow statements, closing documents, bank statements, and any communications with title or escrow companies. Those documents make it much easier to prove entitlement to proceeds.