3 Reasons To Avoid Probate
In previous newsletters, we discussed the probate process in California. It can be a difficult process for loved ones. In a nutshell, when a person passes away, the family may need to start a case with the probate court in order to claim their inheritance. Although having a Will is a good place to start, a Will does not avoid probate. So why is it so important to avoid the probate court?
Here are 3 key reasons why you should avoid probate, if at all possible.
1. It’s All Public Record, So Avoid Probate.
Almost everything that goes through the courts, including probate, becomes a matter of public record. This means when your estate goes through probate, all family and financial information becomes public . This information is accessible to anyone who wants to see it. This doesn’t necessarily mean account numbers and social security numbers. Courts have taken some steps to reduce the risk of identity theft. But, what it does mean is that the value of your assets, creditor claims, the identities of your beneficiaries, and even any family disagreements that affect the distribution of your estate will be public. Most people prefer to keep this type of information private. The best way to ensure discreteness is to avoid probate.
2. It Can Be Expensive
Thanks to court costs, attorney fees, executor fees, and other related expenses, the price tag for probate can easily reach into 5 figures, sometimes 6. These costs can easily skyrocket into the tens of thousands or more if family disputes or creditor claims arise during the process. This money from your estate should be going to your beneficiaries, but if it goes through probate, a significant portion could go to the courts, creditors, and legal fees, instead.
Of course, setting up an estate plan that can avoid probate does have its own costs. But, the costs you incur now to put a plan in place are more easily controlled than uncertain costs in the future, especially when you consider your family may be making decisions while grieving. With proper planning, you can minimize the risk of costly conflict and also reduce or eliminate some costs, like court costs and executor fees; if there’s no probate case there won’t be any probate costs.
3. It Can Take Long Time
The time frame for probating an estate can vary. Probate is not generally a quick process. In California, even simple or small probates can be held up in probate for 6 months to a year or more. During this time the beneficiaries may not have easy access to funds or assets. This delay can be especially difficult on family members going through a hardship. These family members might benefit from a faster, simpler process, such as the living trust administration process. Bypassing probate can speed the disbursement of assets, so beneficiaries can be able to use their inheritance sooner.
You can avoid probate for your estate with proper trust-centered estate planning. This will simplify the transfer of your hard earned assets, and provide lifelong asset and tax protection to your family. To learn more, contact our office to schedule a free consultation.