Why Do We Hear So Many Horror Stories About Probate?
The most common reasons behind the horror stories about probate have to do with the associated time and expense, as well as the idea that it is a public forum that airs family grievances. When having to do a probate for a family member, most people are not expecting it to be such a time suck. The first couple of months of the probate process are very time-intensive, especially if the person named as personal representative does not have a handle on the deceased person’s finances because this person was secretive about his or her finances. It also becomes more difficult if the deceased person had many different financial accounts in many different financial institutions, if there are multiple parcels of real estate, a business, four plus family members who are beneficiaries in an estate (herding cats should come to mind), or family members who are involved in the probate process who are not diligent, unethical, nor are law-abiding citizens.
Another reason for the horror stories that we hear has to do with the fact that most people expect to receive a check within a month or two of someone dying. However, the settling of an estate does not happen automatically; there is a court and notification process that involves distributing assets that must occur first. If you are in probate proceedings, then it will usually take five to seven months before there is even a discussion about distributing money. Most people do not want to wait that long, especially if they know that there is money available and will view probate as a massive inconvenience or hassle. The labor required, associated expenses, and length of time for distribution catches a lot of people off guard.
The legal expenses for probate can be another catalyst for horror stories. A lot of the probate-related legal fees can be avoided by properly using a revocable living trust or other means of probate avoidance by the deceased person. When creating estate planning documents, a discussion should be had with the estate planning attorney about where the expenses for probate and wealth transition are going to lie. Are you going to face the cost of creating a trust now with your own funds, or are your beneficiaries going to have to use your funds in a probate estate proceeding in order to transition assets and wealth? There is always going to be some degree of wealth-transfer-related expenses – who’s going to bear the costs? Will it be you when creating your plan or your children when settling an improperly set up plan?
The biggest horror stories that occur in probate relate to family member fights and grievances. This is particularly the case when there are family members who are included in the estate and who shouldn’t be due to poor relationships with the deceased or with the good-natured primary beneficiaries. People who pass away may leave children whom they did not properly disinherit. For example, if someone has left one dollar under a will, that person is required to be notified of all probate-related proceedings and can hold off distribution to all of the family members if he or she won’t sign waivers of the legal proceedings. Disgruntled family members who only receive a dollar and who are bitter about that can make life miserable for everyone else who received funds.
Problems can also arise if the deceased person didn’t properly consider what would happen if certain family members pre-deceased him or her. Under those circumstances, there would be family grievances over who would get the property and how much to share. There could be a lot of bitterness felt between family members, especially when the main person holding everything together passes away. Generally speaking, all of the horror stories can be avoided through conscientious and proper estate planning. When people use “do-it-yourself” estate planning methods or do not fully think through all of the issues, then horror stories arise.
Does All Of The Deceased Person’s Property Have To Go Through Probate?
Not all of a deceased person’s property has to go through probate. Non-probate assets do not need to go through probate, which typically includes joint titling of assets, beneficiary designations and trusts. Joint titling of assets can be handled by going to the financial institution to have accounts titled with rights of survivorship. However, joint titling of assets can add the negative consequence of having both joint owners being liable for each other’s debts on the joint account. In many instances, joint titling of assets is not recommended.
The second way of avoiding probate is through beneficiary designations. Beneficiary designations can also be set up through financial institutions. The person who is designated as the beneficiary does not have access to the asset during the lifetime of the deceased person. Upon death and presentation of a death certificate, the financial company will distribute the finances or accounts according to the beneficiary designation.
Lastly, a trust will avoid probate because a trust is a legal entity that does not die when the creator of that entity dies. So, a trust can be set up in such a way that the creator can be in charge and manage his assets during his lifetime, and upon presentation of a death certificate, a new trustee can resume managing the trust assets, without court intervention in most costs, for further distribution according to the terms of the trust. In that case, the trust doesn’t die with the owner, and as a result, probate court interference is not necessary in order to transfer the assets of that trust.
For more information on Horror Stories About Probate and avoiding those stories from happening to you, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
Call Us Today
(904) 398-6100
