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Anyone who has been through the probate process will probably
tell you what a nightmare it was, and to do whatever you
can to avoid it. This is because the process moves at a
snail's pace and digs into many personal matters.
Frankly, it is a considerable hassle, and something most
people do not want to deal with while they are grieving.
Probate consists of the following:
- The court is notified that a person has passed away
by someone who has an interest in the estate;
- An inventory of assets is taken;
- The assets are appraised;
- The deceased person's debts and taxes are paid;
- The validity of the deceased person's Last Will and
Testament is proved to the supervising court;
- A long waiting period commences whereby the remainder
of the assets are distributed in accordance with the will,
or under state intestacy laws if there is no will or the
will is invalid.
There are THREE significant drawbacks to probate:
- It is costly. In fact, it can cost
up to ten percent of the gross estate in probate fees.
That is ten percent of the gross, NOT the net; i.e. 10%
of the $200,000 estate is $20,000, even if there are significant
loans against the estate assets (such as mortgage). The
minimum probate fees for a $200,000 estate are approximately
$14,000. There are no probate fees if probate is avoided
by way of a living trust.
- It is public. Even if everything runs
smoothly, a great deal of private information regarding
the estate, its contents, and its distribution will be
a matter of public record. Living trusts are completely
private.
- It is lengthy. It will seem to be never-ending.
The last thing a family wants to deal with when a loved
one has passed away is a costly, highly public process
that drags on for years. Technically, probate can be as
short as six months, but in reality, probate usually takes
one to three years. A living trust avoids unnecessary
delay.
For more information, please visit our probate
information page.
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