February 16, 2014

Probate means, most narrowly, “proving a will,” and derives from the Latin verb probare (try, test or prove). In fact, its practical definition is much broader.

Generally, probate refers to the process for handling an estate after death. Thus, probate matters can involve the estate of an individual who dies with a will (testate), or without one (intestate). Probate cases involve the courts, and in most instances are about and only about gathering assets, paying debts, and distributing what is left over.

Probate also refers to the court and laws that exist to:  (a) address the administration of decedent’s estates; (b) handle trust disputes; and (c) appoint and supervise guardians (protectors of the person) and conservators (protectors of property) for minors and incapacitated adults.

For many people, the word probate carries lots of negativity. We have been conditioned to believe probate is bad, and something else is better. That’s too bad, for in too many situations individuals spend lots of money unnecessarily, in a quest to avoid probate.

With a focus on the details of one’s assets, we can often avoid the need for a probate without any large expenditure of legal fees. Future posts will address strategies in detail, but I’m talking about titling of vehicles and financial accounts, beneficiary deeds for real property, lifetime gifts, etc.

A living trust aka a revocable trust can be an effective tool for avoiding probate in the right situation, and in some cases it’s the only proper tool. Unfortunately, many people whose affairs are simple spend more for a living trust than their estate would ever spend to wrap up things up, even with a probate, only because someone has sold them on the notion that probate must be avoided at all costs.

Probate matters get difficult and expensive when heirs or devisees fight about distributions, or when documents are poorly prepared and unclear. (Cases can also be expensive when they involve complicated assets, a sale of a business, etc.) In fact, though, some of the most involved and costly cases in which I have been involved have arisen out of trust disputes. Thus, having a trust does not necessarily avoid administrative expenses.  

What are the takeaways? Get assistance from a professional, and I have a strong preference for using an attorney for your estate planning needs. (More on this later, too!) Be wary about people who are trying to sell you on the need to avoid probate. And, work hard to structure your life in a way that will reduce the potential for disputes. 



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