When you pass away, your family, who are already grieving your absence, may need to hire an attorney and visit a probate court in order to claim their inheritance. This can happen if you own property (like a house, car, bank account, investment account, or other assets) solely in your name.
Although having a Last Will & Testament is a common and well-known form of planning, a Last Will does not avoid probate. Instead, a Last Will simply makes the probate court aware of your wishes. In order to properly transfer title and ownership, your loved ones will still be forced to go through the legal process to make your wishes happen.
Now that you have an idea of why probate might be necessary, here are 3 key reasons why you probably want to avoid probate if at all possible.
1. It’s all public record.
In Florida, probate proceedings are a matter of public record. This means when your estate goes through probate, all associated family and financial information becomes accessible to anyone who wants to look it up. (This doesn’t usually include access to account numbers and social security numbers. The courts have at least taken some steps to reduce the risk of identity theft.)
However, it does mean 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 available. So, if you disinherited your least favorite sister in your Last Will (we don't judge!), she could look up the record and see she was intentionally excluded, as could other friends and family. Understandably, most people prefer to keep this type of information private, and the best way to keep your business and relationships private is to keep your estate out of probate.
2. It can be expensive.
This will come as little shock, but thanks to court costs, attorney fees, Personal Representative fees, and other related expenses, the price tag for probate can easily reach into the thousands of dollars, even for small or “simple” estates. Attorney fees alone can start at $1500.00 and go up to a given percentage of the estate- for a standard probate proceeding. These costs can easily skyrocket into the tens of thousands of dollars or more if family disputes or creditor claims arise during the process.
You may be wondering why you should care- you’ll be dead after all, it’s not like you’re paying for the process...Except, you kind of are. These fees are taken from the value of your estate- presumably money you’d rather be going to your loved ones. But if your estate has to go through probate, a significant portion of your assets could go to the courts, creditors, and legal fees, instead.
Now, setting up an Estate Plan that avoids probate does have its own costs. But, as Benjamin Franklin once wrote, “an ounce of prevention is worth a pound of cure.”
Like the “ounce of prevention,” the expenses you may face now to establish a stronger plan for your family are easily decided and controlled. By understanding your options and planning properly now, you can prevent your family having to face the uncertain costs of the future. Certainly an additional gift for them when you realize your family will be making these 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 Personal Representative fees; if there’s no probate case there won’t be any probate costs!
3. It takes time.
The time frame for probating an estate can vary widely between states and by the size of the estate itself. On average, in Florida, a standard probate can take between 12 and 18 months before your family receives the gifts you wanted them to receive. And this timeline is based on a fairly smooth process, one without conflict or litigation- which can drag on for years. This delay could be especially difficult on family members going through a hardship who might benefit from a faster, simpler process, such as a Living Trust administration process, for example.
Additionally, if your assets are located in multiple states, your family must open a probate proceeding in each state in which you hold property. And these additional state proceedings will cost your family even more time and money.
One bonus reason- Your family has no control.
The court process discussed above determines how much it will cost from your estate; how long it will take your family to receive the property you wanted them to have; and what details about your life, family, and assets will be made public.
All of the above facts being true, we do have some good news. You have options! Using different approaches, for example, a Living Trust based Estate Plan, you can avoid probate for your estate, simplify the transfer of your financial legacy, and provide lifelong asset and tax protection to your family.
To learn more, please call us at 941-448-1302 to schedule your free consultation. We are here to help you navigate your options to ensure your family and legacy are properly protected.