By of Deloughery Law, PLC
The surviving spouse is protected up to $37,000 from creditors. The historical intent of the Arizona statutes was to protect the surviving spouse when there were creditors so that the spouse's home and basic personal property is protected.
The surviving spouse is entitled to a homestead allowance of $18,000 to be paid from the surviving spouse's one-half interest in the estate. (See A.R.S. 14-2402.) This can be charged against any benefit or share that the surviving spouse receives by the deceased spouse's will, by nonprobate transfer or by intestate succession (unless otherwise provided by the decedent's will or by the governing instrument for a nonprobate transfer).
The surviving spouse is entitled to a homestead allowance of $18,000 to be paid from the surviving spouse's one-half interest in the estate. (See A.R.S. 14-2402.) This can be charged against any benefit or share that the surviving spouse receives by the deceased spouse's will, by nonprobate transfer or by intestate succession (unless otherwise provided by the decedent's will or by the governing instrument for a nonprobate transfer).
The surviving spouse can also keep up to $7,000 worth of household furniture, automobiles, furnishings, appliances and personal effects from his one-half interest. (A.R.S. 14-2403.) Note that this does not say the spouse gets $7,000 in cash. The statute specifically states that it is an entitlement to a "value that is not more than seven thousand dollars in excess of any security interests in that estate" in the types of property listed.
The surviving spouse can also get a family allowance of up to $1,000 per month (up to $12,000 total) of his one-half interest in the estate. (A.R.S. 14-2404.) Inflation over the years has caused these values to seem less than exciting. And in most instances it is not worth litigating over $37,000. The way we normally see these allowances get handled is that the surviving spouse files a Notice of Intent to Claim Spousal Allowances, listing the amounts just mentioned. Then the Personal Representative will take that into account when paying creditors.
Also note that these amounts are payable out of the surviving spouse's interest. I see attorneys get this wrong occasionally, by claiming that this is something that gets paid off the top even at the expense of other beneficiaries. That is not what the statute says.
Take an example. Let's say an estate is worth $1 million, and there are creditors of $900,000. There is a surviving spouse and also children of the decedent (who are not children of the surviving spouse). The surviving spouse would be entitled to $50,000 and the children are entitled to $50,000.
However, if the estate is worth $1 million and there is $1 million of debt, then without the statutes neither the surviving spouse nor the children would get paid. However, because of the statutes, the surviving spouse gets the $18,000 homestead allowance, $7,000 worth of personal property and $1,000 per month (up to $12,000). The children still don't get paid.
Interestingly, if there is a surviving spouse and minor dependent children not related to the surviving spouse, then the surviving spouse still gets the $18,000 homestead allowance, and the minor dependents get nothing. (Imagine a step-parent situation in which the surviving spouse figures that the dependents will get cared for by some other family members.) You can see some interesting scenarios in these days of step-parents and blended families.
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