If you’ve been researching the field of estate planning or shopping around for estate planning options, you have probably heard the phrase “avoid probate” mentioned here and there as a reason for choosing one option over another.
If you have been intimately involved in a probate court proceeding either as executor or an interested party, then you probably know all too well exactly why avoiding probate is such an important concern. But, if not, it may seem like an empty phrase.
For the reasons explained below, however, probate court proceedings and their avoidance are issues you want to think long and hard about as you or family members conduct your estate planning affairs.
What “Probate” Is
To be clear, “probate” refers to the state law probate court proceeding that will occur when a person dies either with a will or without a will and there are significant assets to be distributed. In the probate court proceeding, a judge will oversee the process by which a designated executor pays off debts and distributes estate assets either according to the will or based on state intestacy law.
Interested parties – meaning those who believe they are entitled to the property in the estate – can have their voice heard in probate court, and may argue through their own lawyers about any number of issues, from the validity of a will to what the deceased intended to who is a valid beneficiary and who is not.
The Reasons to Avoid Probate
If the above process sounds long, costly, and even emotionally draining, it definitely can be. The musician Prince died in April 2016, and, as of March 2018, his estate’s probate proceeding was still in process with no sign of wrapping up soon. Lawyers had already claimed up to $6 million in fees while his beneficiaries had yet to see anything, with the worry that there would be nothing left of his 9-figure fortune by the end of the proceeding.
By avoiding probate, you can avoid:
The delay of your beneficiaries receiving your property
Having your estate eaten up by attorney fees, court costs, executor fees, etc.
Family members and friends having to hire attorneys to fight with one another
Relying on an executor and other professionals to be middlemen in transferring property to beneficiaries
Ways to Avoid Probate
The good news is that, by working with an estate planning professional, it can be relatively easy to ensure that the majority of your assets pass on to your beneficiaries without having to put them through the probate process or having their gifts reduced by probate costs.
Such probate-avoiding estate planning processes can include:
Transferring your estates to a trust which can benefit loved ones during your life, after your death, or both
Incorporating life insurance which pays funds to beneficiaries outside of the probate process
Incorporating jointly held property and accounts with a right of survivorship for parties you want to benefit
Planned giving to beneficiaries during your lifetime which limits gift and estate tax liability
Update Your Estate Planning With a Pasadena Estate Planning Attorney
Estate planning and probate attorney Christopher B. Johnson, located in Pasadena, California, has years of experience in all aspects of estate planning, and works with clients from all walks of life to create estate planning tools that reflect their needs and those of their beneficiaries. To request an immediate consultation, call today at (877) 755-9178.