What is Probate and why is it bad? (a.k.a. Why simply having a will might not be enough.)
Probate is the legal process through which the court sees that, when you die, your debts are paid and your assets are distributed according to your will. Indeed, a will is a “ticket” to Probate. If you don’t have a valid will, your assets are distributed according to state law. But….
Probate can be expensive. Legal fees, executor fees and other costs must be paid before your assets can be fully distributed to your beneficiaries. If you own real estate in other states, your family could face multiple probates, each one according to the laws in the state where real estate is owned. These costs vary, but a good rule of thumb is the cost of Probate will be 6% of your total estate.
Probate takes time, usually nine months to two years, but often longer. During part of this time, assets are normally frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor approval.
Your family has no privacy. Probate is a public process, so anyone can see what you owned, whom you owed, who will receive your assets and when they will receive them. The process “invites” disgruntled heirs to contest your will and can expose your family to solicitors.
Most importantly, your family has no control. The Judge and the Probate Court process determines how much it will cost, how long it will take, and what information is made public.
Our firm employs estate planning strategies that can reduce the hassle of the probate process, or even eliminate it altogether. For example, click here to read my post from last week about using revocable living trusts.
Feel free to contact us for more information.
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