Amazingly, there are significant pros and cons of probate. Probate can significantly impact the scope of your estate as well as how it is handled after your death. Its process can mean the difference between a smooth estate transition and an exhausting and expensive legal process for your loved ones.
What is probate?
Probate is the court-supervised process of distributing your assets after you die.
How does probate work?
Whether or not a last will and testament is in place at the time of death, any assets that do not pass directly to a beneficiary must go through the probate process.
If you must be part of the probate process, you should expect to hire an attorney who will arrange for the estate to be opened to probate. to gather and list the deceased’s assets, pay any outstanding debts, bills, taxes, and fees, and then distribute the remaining assets to the intended beneficiaries according to probate law.
What are some of the CONS of probate?
- Exhaustion – Probate is a lengthy and expensive process that can be incredibly draining on the survivors of the deceased. In most cases, you want to do whatever you can to help your family avoid having to go through probate.
- Time – An average probate can last between seven and twelve months. During that time, your family must put forth the time and energy it will take to attend court proceedings, gather paperwork, and meet with an attorney. In addition, any delays in the court systems, contested wills, and complicated estates can delay the probate process even further.
- Cost – Probate can be very expensive. The entire probate process can cost anywhere between 4% and 10% of the value of an estate. That is a big chunk of money that will be surrendered to the government instead of being passed on to your family.
What are some of the PROS of probate?
- Protection – Probate is especially effective in protecting small estates, especially those without a last will, by providing a predictable, step-by-step, process that makes sure that the correct beneficiaries inherit a decedent’s property.
- Public – Another potential benefit to the probate process is for those who want the distribution of their estate to be public knowledge. Anyone can access information regarding an estate as it goes through probate.
- Delayed Cost – For those who do not have the current financial resources to undertake estate planning, then probate allows the associated probate costs to come out of your estate after your death.
Can I minimize the pros and cons of probate by avoiding it altogether?
With good estate planning, many of the cons of probate can be avoided.
- Living trust – A living trust is an excellent tool for real property, cash or bank accounts, vehicles, and personal property to be transferred to beneficiaries neatly, quickly, and out of the public eye. Unlike a last will and testament, the contents of a living trust do not become public record, allowing heirs and beneficiaries to maintain their privacy.
- Community property – A community property agreement is another method that can be used to transfer real property directly to a surviving spouse without probate.
If you would like to learn more about the pros and cons of probate, how probate can be avoided, and the benefits of a diverse estate plan, then we can help.