If you are preparing to create an estate plan, or due to review and revise an existing plan, in St. Louis you have likely heard that probate avoidance is an important component of your estate plan. You may, however, not have a clear understanding of precisely why probate avoidance is such an important part of an estate plan. To understand why people choose to include probate avoidance strategies in their estate plan you need to understand the probate process better and the drawbacks of probate in St. Louis.
Upon your death, all of the assets owned by you at the time of your death must be identified, located, inventoried and valued as part of the probate process. If you left behind a valid Last Will and Testament, the individual named as the executor of your estate will be responsible for these tasks. If you died intestate, or without a Will, someone will be named your personal representative and will fulfill the same basic role as an executor. The probate of your estate must also officially be opened in the appropriate court. The more numerous and complex your estate assets are the longer it takes to complete the valuation process. If a challenge to the estate is filed, your executor must defend your Will. If no Will was executed the heirs of the estate must be located. Eventually, tax returns must be prepared and filed before the remaining assets can be transferred to the intended beneficiaries or heirs of the estate.
As a rule, an estate planning attorney is retained to handle assist the executor/personal representative; however, it is still an arduous and time consuming process for your executor/personal representative. Time is one of the primary drawbacks of probate. Not only does it require a significant investment of time from your executor/personal representative but it also holds up your estate assets for months, even years, meaning your beneficiaries cannot enjoy them or benefit from them in the meantime.
Another significant drawback to probate is the cost. As a general rule, the more assets that are part of the probate process the higher the cost of probating an estate. Your executor and attorney are paid for their services as are appraisers, accountants, and other experts involved in the process.
Because of the time and money spent on the probate of an estate, strategies that help avoid probate are a common addition to any estate plan.
- How Tax and Non-Tax Considerations Impact Estate Planning – Part II - May 25, 2023
- How Tax and Non-Tax Considerations Impact Estate Planning – Part I - May 18, 2023
- The Joy in Joint Trusts - May 11, 2023
