Probate is a mysterious process to many people. Most do not like to consider the end, and therefore only get involved in the probate process after the passing of an elderly parent or relative. Depending on how that person left their earthly affairs, the process can be seen as a minor inconvenience or an onerous burden.
The truth is that whether or not you should avoid probate depends on your circumstances, your preparation and ultimately your goals for leaving a legacy.
Why probate isn’t so bad
Probate is a legal process that simply accounts for the material assets of someone’s life. It seeks to ensure that:
- A person’s will is legally valid and properly followed
- Estate taxes are properly calculated and paid
- Creditors are notified of the death and also potentially paid
- Remaining estate assets are transferred to the appropriate heirs and beneficiaries
For those with few assets, it can actually be a fairly efficient process, especially if the estate contains a valid will. Even larger estates with clear instructions may benefit from the structure of going through independent administration or by probating a will through muniment of title, a special Texas process that allows administrators to transfer assets directly to beneficiaries provided certain conditions are met. In both of these situations, most of the work is done without court supervision or control and court appearances are minimal.
Why avoid probate
Problems can arise, however, in cases with multiple, complex assets, no estate plans, feuding families or estates designated for dependent administration. Dependent administration means that the court must be involved in every step of the administrative process, which can quickly become time-consuming and expensive. Every trip to court costs the estate money and delays the transfer of assets to heirs and beneficiaries. This is what gives probate its bad reputation.
For these reasons, those with higher assets, family-owned businesses or blended families often seek to protect assets through the use of trusts and other estate planning tools. Assets held in trust are administered by a trustee and not subject to probate court. Administering assets via trusts also keeps records private, whereas the probate process is public.
So should you avoid probate?
Some people will tell you that you should try to avoid the probate process at all costs. There are countless articles on the subject on the Internet, some more accurate than others. However, it’s typically not the process, per se, that is at fault.
More often than not, probate headaches happen because the deceased left poor instructions, confusing instructions or no instructions at all. An experienced probate lawyer can assist you in determining whether or not probate avoidance should be part of your estate planning strategy.