3 Reasons to Avoid Probate

To receive their inheritance after your passing, your beneficiaries may need to start a probate case with the Superior Court. This is likely if you own property (such as a house, car, bank account, investment account, or other asset) in your name alone, and have not designated a pay-on-death, or transfer-on-death beneficiary. Although a will is a fundamental form of planning, it does not prevent probate. Instead, a will merely informs the probate court of your preferences; your loved ones must still go through the probate process to distribute your asset.

Now that you understand why probate may be required, consider the following three reasons for avoiding probate whenever possible:

1. Everything is public record.

Almost every court proceeding, including probate, becomes a matter of public record. Therefore, in order to properly wind up your affairs after your death (i.e., pay your bills, submit any remaining tax returns, and distribute your money and property to your selected beneficiaries), a lot of personal and private information will become public through the probate court, including your family and financial information.

The courts have at least taken efforts to reduce the risk of identity theft, so this does not necessarily imply that account numbers and Social Security numbers will be made public.

However, the amount of your accounts and property, creditor claims, the identity of your beneficiaries, contact information for your loved ones, and even family disputes that affect the distribution of your money and property may all be made public.

The easiest method to protect your privacy is to keep your affairs out of probate, as most individuals want to keep this type of information private.

2. It can be costly.

Due to court charges, attorney’s fees, executor fees, and other expenses, the cost of probate can rapidly approach thousands of dollars, even for small estates. If a family member or beneficiary contests the estate, or creditor claims are filed in the probate case, these costs can quickly escalate into the tens of thousands of dollars or more. Your money and property should go to your loved ones, but if your estate goes through probate, a considerable percentage may be allocated to executor fees, legal fees, and court costs.

While creating a will or estate plan that avoids probate does cost money, Benjamin Franklin said it best: “An ounce of prevention is worth a pound of cure.”

Costs incurred now to implement a plan are more easily controlled than uncertain costs in the future, especially when you consider that your loved ones may be grieving while making important estate and financial decisions. You can decrease the possibility of costly disagreement and reduce or eliminate some costs via careful planning.

3. It will take some time.

Although the length of time required to probate an estate can vary significantly by county and based on the value, quantity, and complexity of the deceased person’s assets and property, probate is typically a lengthy procedure. Even probate cases that seem simple can a year or more. During this time, your beneficiaries will not have easy access to the money and property you left them. This delay can be especially challenging for loved ones enduring financial, emotional or medical challenges, as they could benefit from a quicker, more straightforward process, such as the administration of a living trust. Bypassing probate can expedite the distribution of money and property, allowing the beneficiaries to receive their inheritance sooner than they would under probate.

If you own real estate in many states, you generally will have a probate case in each state where your real estate is located. These additional probate cases may cost your family members more time and money. The good news is that with effective trust-centered estate planning, you likely will avoid probate in every state, streamlining the transfer of your financial legacy.