Probate is a process that allows for the administration of your estate under the supervision of the probate or surrogate court in the jurisdiction that is local to you. The executor or personal representative of the estate actually engages in the hands-on machinations, but everything is done under the watchful eye of the court. Anyone who wanted to contest the will would do so during probate, and this is also the period of time during which creditors would be paid and rightful claims against the estate would be addressed.
The transparency and recourse that is provided by probate has value under some circumstances, but in other cases people choose to avoid probate. One of the things about probate that is not very appealing to many is the fact that it delays the distribution of bequests to your loved ones. The probate process can take anywhere from several months to a number of years in some complex cases involving significant sums of money.
And speaking of money, there are expenses that come along with probate that can erode the value of your estate considerably. The probate court charges a fee, and unless the executor chooses to waive it he or she is also entitled to remuneration. A probate attorney will be necessary to guide the executor through the process as well a tax accountant in many cases, and of course these professionals charge for their services. There can also be appraisal fees and liquidation fees to contend with.
So between all of those fees and the time involved probate avoidance can be quite appealing to some. There are expenses involved in probate avoidance strategies, like the creation of a revocable living trust for instance. But for many people such a choice would provide value in light of the many pitfalls that come along with the probate process.
- The Magic of Grantor Trusts - November 1, 2023
- IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis - October 26, 2023
- Understanding the Importance of the Simultaneous Death Act - October 19, 2023
