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One of the many decisions you will need to make about your estate plan is whether you want to avoid probate. Probate is the legal process for settling an estate after someone has died. It is also known as estate administration. The main purpose of probate is to provide inheritors of a deceased person’s property with clear title to the property.

 

During probate, the decedent’s personal representative (also called the executor if the decedent  left a will or the administrator  if the decedent  did  not have a will) locates the decedent’s  assets, pays his or her debts, and distributes the remainder  of the estate to the beneficiaries named in the will or heirs specified by state law.

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Here are three reasons why you might prefer for your estate to pass outside probate:

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1.  Probate  expenses  can  shrink  your  estate  significantly.   Cost is probably   the  most  important  reason  people  decide  to  avoid probate.   Attorneys’  fees  are  often  the  biggest   expense.  Most personal representatives decide to hire an attorney to navigate the probate  process. It can be difficult  for a non-attorney  to figure out the procedures,  forms, and deadlines. Courts do not always have clear instructions available for non-lawyers or staff available to help. Some states require the personal representative to hire an attorney. Attorneys’ fees can be expensive. In some states, they are based on the value of the estate. In others, on the amount of time the attorney spends and what the judge thinks is reasonable. It is not unusual for them to run into the tens of thousands of dollars depending on the complexity and size of the estate and whether the estate is contested.

 

Additionally, there can be fees for executors, court filings, appraisers, and other expenses, such as real estate taxes, insurance, utilities, and property  maintenance. These fees are all deducted  from the estate and can take a big bite out of it. For smaller probated  estates, fees can greatly diminish the distributions  the heirs receive.

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2. Probate can take a long time. Probate is not typically a fast process. A minimum of six months is usually required. Even routine uncontested probates  can take several years to  complete.  While  the  probate drags on, the beneficiaries and heirs wait to get their distributions. By contrast, when probate  avoidance methods  are used, property transfers can be completed  in weeks.

 

3. Probate filings are public. Many court probate filings are a matter of public  record. Probate could open up information  to the public that you would prefer to keep confidential.

 

If you call my office for an appointment, I will be happy to answer any questions you may have about avoiding probate or other aspects of planning  your estate. After a complete  review of your assets, family situation, and goals, I will design a customized plan for you.

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Situations in Which Probate Might Make Sense

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Although avoiding probate is a good plan for many individuals, you may decide that you want your estate to be probated  if any of the following  are true:

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1. The cost and effort  of probate  avoidance exceed the expected expense  of  probate.  A revocable  living  trust is the principal  tool for avoiding  probate. A revocable living trust is more expensive to have prepared than a will. Even once it is created, the trust must be maintained until death. The costs associated with a revocable living trust sometimes exceed the expected cost of probate. This could well be the case if you have a small estate that qualifies for simplified  or expedited  procedures. If you bring your estate planning attorney an inventory of your assets, he or she can advise you whether avoiding probate will likely save you money in the long run.

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2. You expect  challenges  to your estate plan. If you expect your estate plan to be challenged by disgruntled relatives, friends, or associates who are likely to be unhappy with your choices, probate offers an efficient forum in which to resolve the conflict. Challenges to a will or living trust are rare, and the grounds are limited and difficult to prove. They include fraud, undue influence, duress, or mental incompetence.

 

3. You have significant complex debt problems.  Probate may be an advantage if you have many creditors. When an estate is probated, creditors have a deadline by which they must file claims against the estate. If a creditor  misses the deadline,  the debt  is extinguished. Valid claims must be paid before your estate is administered. Your heirs or beneficiaries get their inheritance  without  worrying  about creditors appearing to claim some or all of it. Few estates are in this category, however.

 

When you meet with me, we can discuss whether avoiding probate makes sense in your particular situation as well as any other estate planning issues and concerns you may have.

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