If you look into the subject of estate planning you will hear mention of probate avoidance.
What is probate, and why would anyone want to avoid it?
Let’s examine the subject.
A Legal Process
Probate is the legal process of estate administration. When you draw up a last will, you include the selection of an executor or personal representative. This is the person who will conduct the business of the estate.
The first order of business for the executor will be to admit the will to probate. The probate court determines the validity of the will and subsequently supervises the administration of the estate as the executor is conducting the estate’s business.
The Drawbacks of Probate
The above may sound relatively harmless. However, there are three major drawbacks that you should be aware of when you are evaluating the impact of probate.
You probably want to see your heirs receive their inheritances in a timely manner. That is not going to happen if you maintain personal possession of your property and arrange for its distribution through the execution of a last will.
That property will become probate property. It won’t be distributed to the heirs until the estate has been probated and closed. This can take months in simple cases, and years in complicated cases.
There are considerable expenses that can pile up during the probate process. The probate court will charge a filing fee, and the executor is entitled to remuneration for his or her time and expertise. In many cases the executor will bring in a host of paid professionals, including a tax accountant, an appraiser or appraisers, and a probate lawyer.
When all is said and done, a considerable amount of money can be spent during the probate process. All of this money could have found its way into the pockets of the heirs to the estate if probate was not a factor.
A Public Proceeding
The third probate pitfall that we would like to draw your attention to is the fact that it is a public proceeding. The things that take place during probate become a matter of public record. As a result, anyone who is interested could access the probate records to find out exactly what went on during the process.
For various different reasons you may want your final affairs to be conducted confidentially.
Now, back to probate avoidance strategies. It is indeed possible to arrange for the transfer of your monetary assets to your loved ones in a timely and cost efficient manner outside of probate.
There are various different ways of going about it. If you would like to explore your options, contact our firm to schedule a free consultation.