Estate Planning Education Courses

PROBATE:

WHAT'S IN STORE FOR YOU IF YOU HAVE A WILL OR DIE INTESTATE

Having a will or dying without a will (dying intestate) ensures that your estate winds up in probate court upon your death.

"Probate"... does the word conjure up the image of imposing court buildings and judges in heavy robes? If you've ever been a participant in the process, your memories of it are probably anything but positive. That's because probate can often be time-consuming, costly, public and a legal hassle that most people wish they could have avoided, once all is said and done.

ADDING UP PROBATE'S COSTS

Probate means, literally, "to prove the will," and is intended to verify that an existing will truly does represent your last wishes about the disposition of your property. When a will is absent, the court decides how your effects will be passed on, usually based on state statutes for inheritance. Another function of probate is the payment of debts you may owe to creditors. To ensure that anyone and everyone who might possibly have a claim against your estate gets a chance to cash in, the probate Executor publicizes a notice of your death with instructions to your creditors on where to submit their claims.

Probate also oversees the transfer of any assets owned in your name at death into the names of your beneficiaries. The more assets you owned, the more paperwork that's involved, and potentially, the higher the cost of your probate.

One of the unfortunate aspects of probate is that it offers anyone with a grudgeÑor some other notion of how your wealth should be passed onÑto disrupt the process. All the individual must do is show up in court on the appointed day and declare that he or she contests your will. In that case, the probate will generally be discontinued until another day, and your representative will have to be ready with a defense. Adding insult to injury, your estate will have to pay all the associated legal expenses that such a challenge creates, even if the protesting individual is later found to have no basis for an objection. In fact, your estate will have to pay all the fees arising out of probate: from the administrative filing fees, to the court fees, to the executor's and attorney's fees. Added together, these expenses can total a significant sum.

DELAYS: ANOTHER DISADVANTAGE TO PROBATE

If you're concerned about how quickly your wealth passes on to your loved ones after your death, then take note: probate significantly adds to the length of time it takes for beneficiaries to inherit.

DYING TO AVOID PROBATE

Dying intestate, or without any estate plan at all, is just plain dying dumb. This is one of the worst strategies people employ under the misguided notion that they will avoid probateÑor be able to skip the estate planning process entirely.

Why? Because a cold, hard fact of life is that you can't avoid estate planning. If you don't create an estate plan for yourself, the probate judge will create one for you when you die. And odds are, you wouldn't be very happy with the estate plan the judge creates on your behalf. Furthermore, dying intestate doesn't alleviate the need for probate. If you die without a will, your estate will be subject to a probate process called intestate succession. Dying intestate complicates an already complicated process even more, because the probate court, using statutory guidelines and its own discretion, will decide for you when, how and to whom your assets should be distributed.

Your court-designed estate plan will be under the complete control of the probate court. The administrator must file a bond, get court approval on all decisions and pay an attorney every time he or she needs approval from the court.

There's one final legacy of dying intestate: the damage it can inflict on those you love. Perhaps your family would handle the matter of your intestate estate with complete good grace, maturity and unselfishness toward one another. But under these circumstances, few families are able to muster such cool headedness, reacting instead with heated emotions, hurt feelings, desperation, and yes, even on occasion, greed. And as loved ones start to bicker and compete over who gets what, families can be emotionally torn apart, never to heal and be reunited again. It's not the legacy most of us want to leave our loved ones.

To review the disadvantages of dying intestate:

• It gives the probate judge the right to write an estate plan for you.
• It requires probate.
• It offers no guarantees that your assets will be distributed as you want.
• It can strain family relationships.

So, remember our number one workshop principle: don't die dumb!

WHERE THERE'S A WILL, THERE'S PROBATE

Remember this general rule: if you execute a will as your estate planning tool of choice, then your estate will be probated. When you die, someone will have to file your will and an application for probate in order to begin the process.

A hearing will be held to obtain official acknowledgement of your death, and to appoint an executor over your estate. Also part of the process will be a review of the will to determine if it truly is your last will and testament. After all your debts are paidÑincluding the court costs and administrative expenses of probateÑthen, and often only then, will whatever assets remain be distributed to your beneficiaries according to your wishes.