Many beneficiaries don’t realize the hoops they may have to jump through after someone’s death. If you’ve never been a beneficiary to an estate you might not know what probate is. Estate attorneys recommended their clients avoid probate as much as possible. In addition to prolonging the grieving process by carrying on the estate process for months and even years, probate takes some of your estate’s value.
Avoiding probate saves money and ensures that the estate goes to all the correct heirs. In this article you’ll find information on:
- What is probate
- Why you should avoid it
- The probating process
- Fees associated with probating a will
- How to avoid probating a will
What Is Probate
Probate proves an estate’s last will and testament. Probating a will means that all the assets in the estate are distributed to the correct heirs and any final wishes are fulfilled. If the deceased does not have a will, the beneficiaries must go to probate court to distribute the assets.
Smaller estates can be handled in a matter of weeks, but larger estates can take years. The longer the will remains in the hands of the court, the more opportunity others have to claim parts of the estate. Anyone with a valid claim to the estate can contest the will. This means anyone who feels entitled to the estate can file a petition in probate court. Avoiding probate court ensures no one can take advantage of a loved one’s estate.
Despite popular belief, both wills and trusts can also go through probate. Bank accounts, retirement funds, and life insurance policies with a payable-on-death beneficiary don’t normally go through probate. These are all transferred to the beneficiary immediately upon death.
If the will is proved, then the executor, or representative, of the will manages and distributes the assets accordingly. All fees associated with the estate or the probating process will be paid out of the estate. Because of this, the probate process can actually diminish the value of the will significantly.
Why Should You Avoid Probate
As mentioned, probate can become lengthy, especially if the deceased does not have a will or trust or the estate is significantly large. The longer the probate process goes on, the more issues families tend to have.
More Claims To Estate Assets
The more time the will and estate go through probate, the more opportunity others have to try and claim it. Anyone with a valid claim to the estate can contest the will during probate by writing a petition to the court.
The deceased may have never made a proper will and left important parties out. Depending on the situation, the deceased may have purposefully kept this person out of the will. This can anger and upset many who feel entitled to some or all the deceased’s estate, which can affect the estate if a lengthy court battle ensues.
Increased Legal Fees
If probating the will continues for a long time, it can cost the family thousands of dollars. All fees associated with the will and estate are taken directly out of the estate. This is why most estates that go through probate end up losing a small portion of the estate’s value.
How To Probate a Will
Determining if the will is the true intentions of the deceased requires witnesses or “self-proving affidavits” to sign an affidavit along with the decedent. During this time a judge will also name an executor, who must:
- Get the death certificate
- Present certificate and will to judge
- Identify and appraise assets
- Pay liabilities, debts, and taxes
- Notify beneficiaries
- Distribute assets
Most states have laws that require all possessions to be filed with the probate court, even if they’re already distributed to someone else. During this time, an application or petition to probate the will goes through the court.
As the will goes through probate, others have the opportunity to contest the will if it’s not properly drafted or needs updates.
Fees Associated With Probating a Will
All fees to do with probating the will are taken out of the estate. Altogether, beneficiaries should expect to see 3 to 7 percent of the estate go towards probate fees. Along with the fees from your estate attorney, you should expect to pay for the following fees during the probate process.
Executor Fees
Commonly, the executor waives the fee especially if they are a close family member or they’ve already inherited the majority of the estate.
Estate Attorney Fees
Depending on the state you live in, a court will justify what probate fees are reasonable. Other states may base this fee on a certain percentage of the estate. Every estate attorney charges their clients differently. They may have a flat fee depending on the scope of their work or charge hourly if the probate is extensive.
Also Read: How Do Lawyers Bill Their Clients
Some states will allow estate attorneys to take either a percentage of the estate or to charge an hourly fee. Depending on your state, your estate attorney cannot collect fees until after the probate has ended.
To get a quote on what you should expect to pay your estate attorney during the probating process, call one of the partnered attorneys with My Case Helper to get a quote. When you visit your estate attorney, be sure to ask them for estimates on:
- Estate attorney fees
- Court filing fees
- Probate bond
- Creditor notice fees
- Executor fees
Court Filing Fees
Every state has different filing amounts and fees, some even include administrative fees in this process. If your estate is valued below a certain amount (this can, again, change depending on where you live) the executor will need to file probate with your county clerk.
Unless your estate is valued below a certain amount, the executor will need to file probate with the county clerk. Your estate attorney will also let you know what’s expected in your state.
Probate Bond
Probate bonds are also referred to as fiduciary bonds or estate bonds. These bonds secure the value of your estate. Similarly with insurance, this fee secures all assets in case of an emergency. Many states require the executor to have a probate bond unless the will explicitly states otherwise.
Creditor notice fees
Your state may also require the executor to announce the death publicly to all creditors of the deceased. If the executor decides to post about the deceased in the local paper or another publication, it may cost money.
How To Avoid Probating a Will
As you can see, probating a will can be a lengthy process that could take up the majority of the assets in the estate. It’s best to avoid it, especially if the estate is smaller, or can be threatened by the wrong person who feels entitled to the estate.
There are several ways families can avoid a lengthy probate court. However, the best way to avoid any unprecedented events upon a loved one’s death is to legally prepare for it.
Planning an estate with an estate attorney will ensure that the will and final wishes of your family are kept. Continually updating the will as each year passes ensures that all parties involved have the proper legal say.
Revocable Living Trust
A revocable trust ensures the trust property is not a part of the estate. It is counted as a part of the estate for tax purposes, but any valuable property is held in the trust until after the owner’s death. It also allows for the owner to change the circumstances or conditions of the estate more easily as the years go on.
Having the ability to change the trust while the owner is still living ensures that anyone who feels entitled has valid claims, or has lost privileges understands the terms and conditions before you go to probate court.
Pay-on-Death Accounts and Registrations
Bank accounts and retirement accounts can be converted to payable-on-death accounts. All the owner of the will has to do is fill a form with the list of beneficiaries. When the owner passes, the assets go directly to the beneficiaries without probate court.
Security and vehicle registrations can also be allocated like this in some states. A few states will also allow a transfer-on-death deed, which transfers any property with a deed when the owner dies.
Joint Ownership
Joint ownership provides an easier way to probate a will after the first party dies. The ownership title goes to the other living party, as stated in the joint ownership agreement. There are a few ways to have joint ownership of a will:
- Joint tenancy with right of survivorship: Any joint-owned property is automatically released without probate to the survivors when one owner dies.
- Tenancy by the entirety: Some states allow married couples to take tenancy by entirety. This is similar to joint tenancy, but can only be used by legally married couples. This option still allows owners to avoid probate.
- Community property with right of survivorship: Any community property owned by both parties automatically goes to the surviving spouse without probate. This can only be done in some states and requires the couple to be legally married. The only state with an exception is California.
Finding the right estate lawyer can be tricky. You want an estate attorney who’s not only qualified but wants to help you keep all your assets.
