WHAT IS PROBATE?
Here’s the big picture: probate, which is sometimes referred to as probate court, probate proceedings or probate law, is the legal process through which a deceased person’s affairs are formally settled. First, an attorney must be retained to open up an estate with the court. A person is then appointed to administer the estate, who is often called a Personal Representative or Executor. The Personal Representative works with the attorney and is responsible for overseeing the entire process, beginning with locating a validly executed will. The Personal Representative must then identify and gather all the deceased person’s assets, file an inventory with the court and notify the deceased’s creditors of the pending estate. It’s a lot of work. Next, assets are then pooled together and used to satisfy creditors’ claims. Finally, the balance of assets are ultimately distributed to the proper beneficiaries. It is important that you realize that your state designates your beneficiaries if you fail to decide. That’s what happens in most states, including New York and Florida.
WHY SHOULD YOU CARE ABOUT PROBATE?
There is nothing wrong with having to go through probate. You just need to understand that it has consequences to your family. Let’s start with an analogy:
Probate is like the airport. It’s time consuming. You have to arrive 2 hours early and even short flights manage to eat up your entire day. Once you arrive, you go through an invasive security screening, which is unpleasant for everyone. When you finally are cleared, you want a snack and a drink. Unfortunately, you’re going to have to pay twice as much as usual for just about everything. Finally, you sit in your seat and take a deep breath right? Wrong. You wait to board the plane with the uncertainty of knowing that at any moment your plane can be delayed, and even worse, cancelled. This process can be aggravated exponentially if you have connecting flights. At the end of the day, we know that we don’t have to fly, but we choose to do so anyway because it’s faster.
Like the airport, probate is time consuming. The process is extremely lengthy to begin with, and in our turbulent economic times, it shouldn’t surprise you that there are substantially less clerks, case managers and court staff. Depending on the complexity of the estate, it could last for years. It’s also expensive. You can expect to incur court costs and ongoing attorneys’ fees. Some attorneys charge for their billable time while others charge a percentage of the estate. You also need to understand that you can expect significantly higher fees if you own real property in another state. I equate the hassle of connecting flights with having to open an ancillary probate in another state. Likewise, probate is unpredictable and it is not private. Many people will see your will, including attorneys, judges and staff. Like the airport, probate is not the only way and certainly isn’t the fastest way. In fact, there are far better alternatives available to you right now, which can avoid the entire hassle.
Often overlooked is that probate is emotionally draining. It’s hard enough to grieve a loved one’s passing. Having to immerse yourself in their business and affairs further amplifies the emotional toll on your family.
Last, but not least, one of my clients relayed to me his thoughts at a recent funeral. He said to himself, “you left me with a mess”. Knowing it’s completely avoidable, I couldn’t agree more. As you will learn in the crash course on wills, a will takes effect only upon death and does not avoid probate. You will learn from the trust video that you don’t need to wait until you’ve passed away to carry out your wishes, and properly utilizing a trust can avoid probate. In fact, with careful planning and execution, you can: 1) easily achieve all of your wishes during life; 2) reduce if not eliminate the need for probate; and 3) prevent unwanted and unnecessary litigation later. Doing a cost/benefit analysis will reveal that you’ll spend a lot more money going through probate than avoiding it.
(Sometimes people refer to going through probate as probating a will, probating, going through probate, probation and probate service.)