Avoiding probate is a common goal for individuals deciding how they want their money and property to be handled when they pass. It is a worthy one and is regularly promoted by estate planning attorneys across the nation. However, probate is not an inherently bad process and does not always need to be avoided.
Probate can be simply defined as the court-supervised process of distributing a deceased person’s money and property—the key word being “court-supervised.” Court supervision has both pros and cons. It makes the process of distributing money and property a public proceeding that is subject to timelines that are slow and often drawn out. The cost of court involvement also complicates matters.
When you are evaluating your options, the benefits of probate may outweigh the cons in the following situations:
Concerns regarding the Proper Execution of Wishes:
In some instances, you may have difficulty identifying individuals whom you believe will really honor your wishes for how your money and property are to be managed and distributed. In such cases, you may want the probate court to oversee the process and ensure that your wishes are carried out according to your documented plan, as long as what you have requested is allowed under your state’s default rules.
Concerns regarding Family Disputes:
Probate proceedings may also be warranted when there are family disputes or conflicts between heirs (those legally entitled to your money and property at your death). Although privacy is often valued when it comes to family matters, the public nature of probate proceedings may promote accountability among family members in such cases. Heirs who might have acted unscrupulously or unfairly may be restrained if a judge is overseeing the proceedings. Moreover, there is a finality associated with judicial processes that could further encourage an individual to honor the judge’s ultimate decision.
Concerns regarding Significant Debt and Insolvency:
When someone dies, the law requires that, in addition to providing for heirs, the estate also pays off any of the decedent’s outstanding debts or bills. This requirement can be a challenge if the bills and debts are higher than the estate’s value. The probate process can be extremely valuable in such circumstances because the court can determine how creditors are paid and how much they receive.
Further, because of the structured nature of probate processes, creditors who want to be paid from the estate must submit to the court’s requirements. As a result, probate may facilitate greater levels of loan forgiveness for an estate.
What should I do next?
Making decisions about how to handle money and property when emergencies arise requires considering many different factors. The factors discussed above are only a small sample. Therefore, it is essential to really understand exactly what money and property are at issue, the nuances of the probate process in your state, and the overall goals and values that you want to preserve by passing on your money, property, and legacy. Our team can help you evaluate your current situation and identify the types of plans that will best effectuate your wishes and protect your loved ones.