What Authorization Forms Must an Heir Sign to Direct Distribution of Real Property Sale Proceeds in Arizona? | Arizona Probate

Detailed Answer

If you inherit real property in Arizona and the title company or escrow agent sells that property, you must sign certain documents to direct the distribution of sale proceeds. Which forms you need depends on whether a personal representative (PR) is appointed, the estate’s size and whether the property passes through a trust.

1. Estates with an Appointed Personal Representative

When a probate court appoints a PR, the PR handles sale proceeds under Arizona’s Probate Code. Key forms include:

Receipt and Release under A.R.S. § 14-3701: The PR signs a receipt acknowledging funds received. (A.R.S. § 14-3701)
Disbursement Authorization provided by the title company or escrow agent: This form instructs them how to split proceeds among heirs and creditors.
IRS Form W-9 for each payee: Required by most escrow agents to report distributions for tax purposes.

2. Small Estate Affidavit (No Personal Representative)

If the decedent died intestate or you choose not to open full probate and the total personal property (which includes sale proceeds) does not exceed $75,000, heirs can use a small estate affidavit:

Affidavit of Entitlement under A.R.S. § 14-3973 allows heirs to collect sale proceeds without formal probate. All heirs sign and swear to the property’s value and heirship. (A.R.S. § 14-3973)
Title Company Disbursement Instruction: Even with an affidavit, the escrow agent usually requires a distribution form outlining each heir’s share.
IRS Form W-9 for each heir receiving more than $600.

3. Trust-Administered Property

If the real property sits in a revocable or irrevocable trust, use the trust certification process:

Trust Certification under A.R.S. § 14-7301: A successor trustee provides a certified copy of trust terms and shows authority to sell. (A.R.S. § 14-7301)
Distribution Direction from the successor trustee: Often a title company form instructing disbursement to beneficiaries.
IRS Form W-9 or waiver forms as required by the escrow agent.

Helpful Hints

Confirm whether you need full probate or can use a small estate affidavit (A.R.S. § 14-3973).
Obtain and review the escrow company’s disbursement instruction form early in closing.
Collect IRS Form W-9 from each payee to avoid delays in federal reporting.
If more than one heir signs, ensure identical share percentages on every form.
Consider consulting a probate attorney if estate assets exceed statutory limits or disputes arise.