Through the years, I have discussed the advantages and disadvantages of probate with many clients, friends, family members, colleagues, and acquaintances. The only thing I can say for certain is this: the average person who is not an attorney or a CPA believes that probate is evil and should be avoided at all costs.
There are valid reasons one should avoid probate; however, that does not make the process evil. Nor does it mean that everyone, always, everywhere should avoid probate at all costs.
There are advantages to probate. Here are a few:
Supervision and Accountability
Even in a so-called “unsupervised probate proceeding,” the actions of the personal representative are overseen to some degree by the probate court. This provides assurance that debts are properly paid, claims are resolved and property is distributed appropriately.
Forum for Dispute Resolution
All estate issues are resolved by and overseen by the probate court, including guardianship of minors, conservatorship of incapacitated parties, disputed claims by creditors and will contests.
Time Limitation for Creditor Claims
Creditors, given proper notice, have a limited time to file a claim against the decedent’s estate. After the period has expired, all claims are barred. The shortened claims period provided in a probate proceeding may be particularly beneficial to the estate of a deceased professional (e.g., doctor, lawyer, accountant) who may be exposed to professional liability.
There are also disadvantages to probate. Here are a few:
When a probate proceeding is initiated, there can be a lack of privacy. Unless ordered closed or sealed by the Court, the Will, beneficiary information, asset information and the claims of creditors are all matters of public record.
Property distribution may be time-consuming, depending on the complexity of the estate, Will disputes and the jurisdiction. In most states, the probate process takes 12 to 18 months, but even the simplest probate process will take no fewer than 7 to 8 months (due to the 6 month creditor claims period).
Inflexible Court Process
The probate process must adhere to state statutes and strict court rules.
Typically, assets are frozen and unavailable to beneficiaries (including the surviving spouse) for a certain period (usually the expiration of the creditors’ claims period) without prior court approval.
Cost and Fees
The costs of administering a probate estate can be expensive, especially with attorneys’ fees, executors fees, accounting fees, filing fees, bond premiums, appraisal and business valuation fees and other miscellaneous fees. The cost will increase if there is a Will contest involving litigation.
Ancillary probate is a proceeding conducted in a different state from the one in which decedent resided at the time of death. Such proceedings are required because the decedent owned real estate in another state and/or the decedent owned personal property, such as cars, boats or airplanes, that are registered and titled outside of the decedent’s home state.
“Probate – Should I or Should I Not?” that is the question. The best answer is one that you reach after becoming fully educated on the advantages and disadvantages of probate, the alternatives available to you and their cost, and the nature and extent of your “stuff.”
Many Estate Planning attorneys offer free initial consultations. Some, such as myself, present Seminars to the public that are free, informative, and helpful in deciding the best plan for you and your family. Attending one of these free Seminars will go a long way in helping you answer the question, “Probate – Should I or Should I Not?”