When you pass away, your family may need to file documents with the Probate Court in order to claim their inheritance. Although having a Will is a good basic form of planning, a Will does not allow you to avoid probate. Instead, a Will simply lets you inform the Probate Court of your wishes—then your loved ones must go through the probate process to make your wishes legally binding.
There are three key reasons why you may want to avoid probate.
- It is all public record.
Almost everything that goes through the courts, including probate, becomes a matter of public record. This means that in order to properly wind up your affairs (i.e., pay your bills, file any remaining tax returns, and distribute your money and property to your chosen recipients), documents—including associated family and financial information—could become accessible through the Probate Court to anyone who wants to see them. The value of your accounts and property, creditor claims, the identities of your beneficiaries, contact information for your loved ones, and even any family disagreements that affect the distribution of your money and property may be publicly available.
- It can be expensive.
The court costs, attorney’s fees, executor commissions, and other related expenses associated with the probate process are likely create expenses for your loved ones that can easily escalate into thousands of dollars, even for small or simple matters (like the transfer of one piece of property). The probate process can easily cost tens of thousands of dollars, if family disputes or creditor claims arise during the process. Your money and property that should be going to your beneficiaries, may be significantly diminished by the probate process.
Although setting up an estate plan that avoids probate does have its own costs, the costs that you incur now, to put a plan in place, are more easily controlled than uncertain costs controlled by the Probate Court, after you pass away.
- It can take a long time.
Probate cases, even seemingly simple ones, take at least six months or even years, during which time your beneficiaries may not have access to the money and property you intended to leave them. A simpler process, such as the administration of a Revocable Living Trust makes it possible for your loved ones to receive their inheritances shortly after you die.