Avoiding Probate? What Clients Should Know

When going through estate planning, there is always an inevitable question. Should I avoid probate? Let’s start by defining probate. The legal prospective of probate is, the process of clearing title to certain property when someone dies, so that ownership can be transferred to those receiving the inheritance. Probate can be costly, and avoiding it takes time and energy to accomplish the task. It is important to analyze whether this is the best choice for you.

Reducing Cost

Avoiding probate can save money. The cost associated with probate are generally attorney fee, filing fees, and compensation for personal representatives (known as executors). Some states such as California, Florida, and New York impose fee based on the value of the asset subjected to probate. However, in other states, such as Massachusetts, the cost is determines on the types of papers the court requires. It is important to understand the laws that govern assets in your state.

Reducing Complexity

Many people express the desire to simplify things for their family during the estate planning process. IF this desire is expressed it is important for them to avoid probate. This will lessen the time it will take the heirs to gain access to the assets and lessens the steps to transfer ownership of assets.

Increasing Privacy

Most paperwork filed in courts is considered public record. This means that anyone is able to view the will and information about the value of the estate. If the estate goes through probate then a notice has to go out to all interested parties. If you would like to keep the terms of your estate private, then it is a good idea to avoid probate. This allows you to disinherit certain relatives, keep certain aspects of the estate private, and determine how the estate is divided.

Avoid a Will Contest

This goes back to privacy a little. By avoid probate, you can avoid disinherited relatives from contesting the will. If the assets go into probate, a court ordered notice is sent out and assets are transferred into a trust (or something similar). Depending on the state, challenging the non-probate estates can be considerably more difficult, then if the estate went through probate.

Accepting Paperwork

Avoiding probate comes with certain administrative responsibilities. Many times, ownership of accounts need to be changed, beneficiaries need to be updated, and real estate conveyed through deeds. These tasks require time and energy. Some even have fees associated with them. This can be a burden for many people making the idea of avoid probate unattainable, but with the help of a good financial advisor, many of the burdens are eased and you are guided through the paperwork.