The Mine Field of Probate
By: Barry E. Haimo, Esq.
September 7, 2022
Probate is the process of winding up someone’s financial and legal affairs. It can be time consuming, expensive and unpredictable. It can also be quite emotionally draining. Most people find it to be a hassle, and one not worth repeating.
That’s because, if you’re a personal representative, or the person responsible for handling the estate, you’re thrusted into your loved one’s personal affairs. It starts out as a mining expedition to identify and locate assets and creditors. Then you become the manager and must administer the estate properly, as a fiduciary.
A fiduciary is someone with an obligation to perform duties and is held accountable for falling below a standard of care that is higher than ordinary negligence. All the while you are generally required to retain an attorney to assist you through all stages of proceedings.
From the beginning, you’re lucky if you are familiar with the identity and location of your loved one’s assets and creditors, their estate plan and planning documents, as well as the location of their planning documents. Most people don’t share the details of their plan with their families, and they certainty don’t tell their families where they store their documents.
You start with a comprehensive search of their home, office, etc. Call their attorney if you know who that is. Hopefully they have an estate plan, which includes a will or a trust, or at least planned ahead in such a way that their estate bypasses probate entirely.
If you can’t find a will after conducting a comprehensive search of your loved one’s home and office, you have to proceed with the understanding that there is no validly executed will. This is because, for example, you cannot open up bank safe deposit boxes or other private accounts to search for a will until you first obtain a court order.
Banks are difficult so you can expect them not to allow you into a safe deposit box at this stage of proceedings unless you either have a court order granting entry for the limited purpose of taking inventory, or you are named on the account jointly.
Hopefully your name’s on the account so it’s not included in the probate estate. Otherwise, obtaining a court order requires opening up an estate with the court and petitioning for an order to conduct an inventory of the box. Yes, ultimately the contents will be distributed only via obtaining another court order to that effect. Nearly every significant action in probate must be initiated by a court order.
Here’s another example of a common cause of emotional distress: suppose your loved one owns property in their name alone and that property incurs ongoing operating or administrative expenses. These expenses will not pay themselves, and the creditor is probably not very patient. You’re going to have to work quickly to become appointed officially as personal representative.
That’s likely the only way that you will gain access to your loved one’s finances, open up an estate account (possibly a restricted account which is common in Miami-Dade County) and resume making payments out of the estate. Otherwise, the creditor may pursue foreclosure if it’s land or repossession if it’s personal property. In either case, there’s an easier more painless solution: bypass this whole process.
Another example that serves as a major hurdle in probate administration occurs when someone challenges a will. This can seriously deplete the value of an estate and significantly delay the administration.
In South Florida, where there’s a large elderly population, unfortunately claims of undue influence and incapacity are quite prevalent. In a claim for undue influence, the claimant asserts that someone in a position of trust and confidence took advantage of that relationship by manipulating the deceased into executing documents that would more favorably benefit him/her. Quite simply, the claimant wants those documents ruled invalid.
Similarly, the claimant in a claim for incapacity, wants the executed documents ruled invalid, but on the basis that the deceased did not possess the required “mental capacity” to execute the document in the first place. Having an estate plan in place ahead of time – especially using a trust – could substantially reduce the likelihood of these problems arising.
That’s because the trust is created during life, and every transaction initiated by the creator of the trust strengthens the argument against incapacity. Likewise, if the creator of the trust lacks mental capacity, the designated successor trustee steps in and takes over management of the trust, making it difficult, if not impossible, to take be taken advantage of.
The above examples serve to illustrate the dangers of probate. It’s not just time consuming, expensive and unpredictable. It touches every single one of my clients’ emotional pressure points.
Originally Published 4/22/13 – Updated 9/7/22
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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