What’s So Horrible About Probate That Makes Everyone Want To Avoid It?
Comprehensive estate plans come in all shapes and sizes and can be crafted and tailored to accomplish a wide range of objectives. But regardless of the complexity and amount of assets or specific structures and documents involved, most estate plans share one common goal: avoiding probate.
But what does it mean to avoid probate, and what makes probate so awful that estate planning lawyers want to ensure their clients steer clear of it?
What Is Probate?
Before you can understand why probate avoidance is so important, you need to understand the probate process. In Michigan, as in every other state, probate refers to the court process of validating and distributing a deceased person’s assets, settling their debts, and transferring their property as outlined in a will. Without a will, probate is necessary to pass ownership of the decedent’s assets to the individuals entitled to receive them under Michigan’s laws of intestate succession.
Though probate can be required where there is a valid will, a good estate plan will include other structures – primarily a trust – that can keep assets out of the probate court and avoid the process altogether. That is why a will alone is only one part of an effective estate plan.
Probate Can Take a Long Time
After a loved one passes away, beneficiaries and other family members usually want to wrap up the decedent’s affairs and distribute their assets as quickly as possible so they can move forward with their lives. Probate will accomplish neither goal.
In fact, the probate process can take years to complete, with procedural hurdles and hiccups leading to delays and complications. This can be enormously frustrating for beneficiaries as well as those charged with administering the estate. Avoiding probate ensures a faster and more efficient transfer of assets to heirs and a prompt resolution of all outstanding issues.
Probate Can Cost a Lot
The probate process is notorious for its associated costs, which can be substantial. Court fees, legal fees, executor fees, and other administrative expenses can quickly erode the estate’s value. These costs can be avoided by utilizing strategies like setting up a living trust, naming beneficiaries on accounts and assets, or gifting property during one’s lifetime. By avoiding probate, you can preserve more of your assets for your intended beneficiaries.
Probate Is Public Record
Probate proceedings are public records, meaning that records and information about the deceased person’s assets and liabilities are accessible. Pleadings, documents, receipts, or spreadsheets filed with the court as part of the probate proceedings will generally be publicly available. This may or may not be a significant concern for you, but if you value your privacy, probate is not where you want to work out your estate related issues.
Probate Can Increase the Likelihood of Conflicts
Probate can often lead to family disputes and legal challenges. Disgruntled family members or creditors may contest the will or dispute the distribution of assets, which can result in costly litigation and emotional turmoil. By avoiding probate and using alternative estate planning methods, such as clear and well-drafted documents, you can minimize the potential for conflicts and ensure a smoother transition of assets.
Probate Can Lead to Unwanted Outcomes
Avoiding probate provides individuals with more control over the distribution of their assets. The decision made by a judge in probate proceedings may not always align with the decedent’s intentions. With strategies like the preparation of revocable living trusts and powers of attorneys, individuals can maintain control over their assets during their lifetime and designate how they should be distributed upon their passing.
Probate Can Leave Assets Vulnerable
For those who want to ensure their assets are protected for the benefit of their heirs, avoiding probate is essential. Assets held in certain legal structures, like irrevocable trusts, may be shielded from creditors, lawsuits, or other potential financial challenges. This level of protection is not always available through the probate process.
Given the preceding parade of avoidable outcomes, keeping your estate out of the probate process is imperative for you, your heirs, and your beneficiaries. The best way to ensure thatyour estate plan accomplishes all your goals, including avoiding probate, is to work with an experienced estate planning lawyer.
If you have any questions about the Michigan probate process or need assistance preparing or modifying your estate plan, please contact Stewart Weiner at Maddin Hauser.