Probate is the legal system that is set up to allow personal representatives of an estate to officially prove a will or estate to the probate judge or administrator. Probate provides for the gathering of estate assets, payment of debts, and distribution to beneficiaries or heirs of the estate. When it works properly, it is an orderly system that provides structure and rules so that each person receives what he or she is due under a will and the law. However, there are many reasons why you want to avoid the probate system as much as reasonably possible.
First, probate can be very slow. Once a personal representative is approved, in most cases there will be debts that must be paid. The personal representative is required to provide notice to creditors of the pending probate case. Creditors have the ability to file claims. In some cases, a personal representative must go through the court each time he or she wants to make a payment. Only after the debts are paid can the personal representative pay out to the designated heirs and beneficiaries the assets that remain in the estate. In addition, interested parties may come forward and contest the will, adding more time before the assets can be distributed. This means that the assets may be tied up for months or even years while creditors or those contesting the will litigate the issues.
Another reason is privacy. Wills and probate proceedings are public. This means that anyone can watch the court case or obtain a copy of the will. The precise distributions in your will or struggles in court can be viewed and discussed by any member of the public. Any assets that pass outside probate, by contrast, likely is not open to public review.
Finally, reducing the assets which must pass through probate can simplify your estate and reduce the potential liability of estate taxes. If you pass assets outside of probate through, for example, trusts, that will reduce the size of your estate, making it less likely that your estate will be large enough to incur estate taxes. Moreover, some assets are complicated to transfer, such as certain types of firearms. Creating the proper estate planning documents that allow those complex assets to pass outside of probate can reduce the difficult and expense involved.
We have helped our clients understand the probate process and what we can do to help reduce the time and expense involved. Call us today at (320) 299-4249 for a consultation about your estate.