Probate fees can be costly and could significantly reduce the value of legacy you can pass on to your family. Whether it is succession planning for a family-owned business or ensuring that the assets of your estate are transferred to your loved ones with minimal tax and probate impact, we are here to help.
PROBATE
Probate is simply the court proceedings that conclude all the legal and financial matters of the deceased, and through which estate assets are distributed according to instructions in a will. The probate court acts as a neutral forum in which to settle any disputes that may arise over the estate. This isn’t always as simple as it sounds. The probate process can be expensive and time-consuming, and it is completely public. Many people would prefer to avoid it, if possible.
Unfortunately, the probate system is very complex and has some serious drawbacks. Here are some facts about probate to consider.
First, probate can be expensive.
Probate costs vary depending on the state in which probate is carried out. Though all states require the payment of court fees (which may only be a few hundred dollars), attorney fees could add significantly to the total cost. Typically, attorney fees are based on what is reasonable for the required tasks. These fees can rise significantly if the will is contested or when other extraordinary issues arise.
Second, probate can take a long time.
Probate often takes a few months to a year or more. And the more complex your estate (will, assets, and debts), the longer it could take. Your beneficiaries may have to wait until probate is concluded to receive the bulk of their inheritance.
Another problem is that probate offers no privacy.
In most states, the proceedings of the probate courts are a matter of public record. This means your heirs will have no privacy. Unless you take specific steps to safeguard your privacy, almost anyone can go down to the county courthouse after your death and find out exactly how much you owned, as well as how much you owed and to whom. Some sales people actually use the probate files to obtain leads.
The estate documents for an amazing number of famous people are readily available to anyone who cares to look. In fact, the wills of some people have even been posted on the Internet. An example is Michael Jackson’s will.
Michael Jackson’s will was seven years old when he died at age 50. He gave his entire estate to the Michael Jackson Family Trust and named his mother as guardian of his three minor children. But as I mentioned earlier, several aspects of his estate planning (e.g., unfunded living trust and executor problems) proved to be problematic.