The Pros and Cons of Probate
In estate planning circles, the word “probate” often carries a negative connotation. Indeed, formany people—especially those with valuable accounts and property—financial plannersrecommend trying to keep accounts and property out of probate whenever possible. That beingsaid, the probate system was ultimately established to protect the deceased’s accounts andproperty as well as their family, and in some cases, it may even work to an advantage. Let uslook briefly at the pros and cons of going through probate.
For some situations, especially those in which the deceased person left no will, the systemworks to make sure all accounts and property are distributed according to state law. Here aresome potential advantages of having the probate court involved in wrapping up a deceasedperson’s affairs:
● It provides a trustworthy procedure for redistributing the deceased person’s property if thedeceased person did not have a will.
● It validates and enforces the intentions of the deceased person if a will exists.
● It ensures that taxes and valid debts are paid so there is finality to the deceased person’saffairs rather than an uncertain, lingering feeling for the beneficiaries.
● If the deceased person had debt or outstanding bills, probate provides a method for limitingthe time in which creditors may file claims, which may result in discharge, reduction, or otherbeneficial settlement of debts.
● Probate can be advantageous for distributing smaller estates in which estate planning wasunaffordable.
● It allows for third-party oversight by a respected authority figure (judge or clerk), potentiallylimiting conflicts among loved ones and helping to ensure that everyone is on their bestbehavior.
While probate is intended to work fairly to facilitate the transfer of accounts and property aftersomeone dies, consider bypassing the process for these reasons:
● Probate is generally a matter of public record, which means that some documents, includingpersonal family and financial information, become public knowledge.
● There may be considerable costs, including court fees, attorney’s fees, and executor fees,all of which get deducted from the value of what you were intending to leave behind to yourloved ones.
●Probate can be time-consuming, holding up distribution of your beneficiaries’ inheritance formonths and sometimes years.
● Probate can be complicated and stressful for your executor and your beneficiaries.
Bottom line: While probate is a default mechanism that ultimately works to enforce fairdistribution of even small amounts of money and property, it can create undue cost and delays.For that reason, many people prefer to use strategies to keep their property out of probate whenthey die.
An experienced estate planning attorney can develop a strategy to help you avoid probate andmake life easier for the next generation. For more information about your options, contact us today to schedule a consultation.
(This is informational only and is not intended to be legal advice.)