Simply put, probate is a legal process for settling debts and distributing assets after a person passes away. There are many myths and misconceptions about the probate process, the most common of which we will dispel here.
If the Decedent Had a Will, His or Her Estate Won’t Have to Go Through Probate
While a will allows you to choose the executor of your estate, name a guardian for your minor children, and convey your wishes about who receives your assets after you pass away, it does not allow your estate to avoid probate. As a matter of fact, part of the probate process involves determining the validity of a will.
The Only Way to Avoid Probate Is to Create a Trust
Trusts are powerful estate planning tools capable of helping you accomplish a wide range of planning goals, including probate avoidance. However, having a trust is not the only way your estate can avoid probate. Assets held in joint tenancy with rights of survivorship, payable on death accounts, and multiple party accounts with financial institutions can also avoid probate.
It Takes Years to Complete the Probate Process
We’ve all heard stories about celebrities and wealthy families fighting over estate assets for years on end. And if you are expecting an inheritance, it can seem like years before probate is completed and you actually receive your inheritance. The truth is that while probate can be frustrating, time-consuming, and fraught with delays, the vast majority of estates are settled within a year and oftentimes require considerably less time than that. Most states also allow for what is known as a summary probate when an estate is small and other conditions are met. Summary probates can be completed in a few months. Factors that influence the amount of time required to probate an estate include the number of beneficiaries, the size and complexity of the estate, disagreements between beneficiaries, will contests, the lack of a will, and situations where the decedent had a large number of creditors or debts.
It’s Best to Name the Oldest Child as Executor of the Estate
An executor is the individual who administers an estate during probate. You can name your executor in your will. (If there is no will, the court has the authority to select a “personal representative” to administer the estate.) Although many people want their oldest child to serve as executor, doing so is not a requirement. In fact, it may not even be the wisest choice. Given the importance of the executor’s role and the numerous responsibilities involved in the probate process, you should put a great deal of thought into choosing your executor.
The Cost of Probate Is So High That There Will Be Little Left in the Estate for Beneficiaries
While probate can be expensive, it typically costs less you might think. The cost varies greatly based on where the estate is probated, but it generally falls within a range of three to seven percent of the estate’s value. Many of the factors that influence how long probate takes also impact its cost, particularly the size and complexity of the estate and whether disputes arise between beneficiaries.
We can create a plan to help ensure your estate will not have to go through probate. If you are responsible for probating an estate, or think you will be soon, we can guide you through every stage of the process. Contact us today to get started.