When you search the Internet looking into the subject of estate planning, you will invariably see mention of the word probate quite frequently. There’s no particular reason why the layman would know anything about probate or even what it entails, so we would like to explain exactly what probate is before getting into why you might want to avoid it.
Probate could be succinctly described as the legal process of estate administration when an individual passes away, or, otherwise stated, the management and distribution of that individual’s assets, property, and/or possessions. The court supervises the administration of the estate; the actual hands-on administration is done by the estate executor or personal representative.
Why would you want to avoid probate? The two reasons why you may want to avoid probate would be to save time and to avoid asset erosion. Depending on the jurisdiction and the complexity of the estate, the process of probate could take anywhere from perhaps 6 to 8 months to several years in very complicated cases. Another factor that could come into play with regard to the duration of probate would be whether or not the will is being contested.
The costs associated with probate can really add up to erode the overall value of your estate. The court itself is going to charge a fee, the executor is entitled to a fee, and your probate attorney is also going to charge a fee for his or her services. In addition to these professionals, final taxes must be handled and this is usually going to require a tax accountant who will also charge a fee. In many cases an appraiser will be brought in and he or she will have to be paid as well.
So we’ve established that probate can take a good amount of time and that there are significant costs associated with the process. But is there anything good about probate? The answer is that there is, depending on what your interests are. If you are an heir who wanted to contest the will probate would provide a venue for doing that. The supervision of the probate court also ensures the transparency of the actions of the executor which protects the integrity of transactions made on behalf of the estate.
- Own Property Out of State? You Need a Living Trust - October 21, 2021
- Three Misconceptions That Lead to Estate Plan Mistakes - October 19, 2021
- Your Original Estate Plan May Not Be the Final Version - October 14, 2021