Years ago there was a bestselling book called “How to Avoid Probate!” The theme of the book was that probate was horribly expensive and should be avoided like the plague. It is worth re-examining this view for those of us who will die in the 21st century, which presumably includes most people reading this column.
First, what is probate? Wikipedia defines it as the “legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person’s property under the valid will.” In this process, an attorney hired by the executor of the estate will file a Petition in District Court, and will serve copies of the Petition to heirs entitled to notice, thereby commencing the probate process. A Notice to potential creditors of the deceased is placed in a local newspaper, informing creditors that any debts or other claims against the deceased must be timely presented or the claims will be barred by law. Like any other form of litigation, initiating a probate proceeding means incurring attorney fees and related costs such as filing fees and newspaper publication expenses.
Utilizing a living trust is one of the more common ways to avoid probate. Utilizing this method, a person (known as the grantor) places all of his or her assets into a trust while still living. The language of the trust will specify the persons who will receive the assets upon the death of the grantor. A named trustee will have the responsibility of disbursing these assets. No court intervention will be necessary, and the process can be accomplished much more quickly than can be accomplished through a probate proceeding. Legal expenses will be minimal. Unlike a Will, which is made public in a probate action, the terms of the trust are kept private.
In view of the above, why would anyone plan for probate after death? There are several situations where probate has advantages. Here are some examples:
1. Where one anticipates contention and disputes among heirs. A death in the family can often bring out the best in people, but sometimes can bring out the worst. If one anticipates family feuding over money and property, the judicial supervision involved in probate can resolve these disputes and also avoid overreaching by a trustee.
2. People leave behind not just assets but also debts. A probate filing forces creditors to present their claims within the statutory four-month period. Once that period expires, the court will authorize the distribution of assets without fear of future claims being made against the assets.
3. Persons who have a living trust often forget to move their assets into the trust. Upon death, it may be necessary to institute probate in order to administer the assets which were inadvertently left out of the trust.
Shelby – found this photo being used by another site explaining inheritance. Therefore I’m assuming it’s not protected. Looks like it’s from an old movie.