If you have a will or are thinking of preparing one, you need to understand how a will works after your death. The probate process is not cheap or quick. It can take several months and can continue for years after you have passed away. There are several steps in the probate process. The Probate Court in your state will control the process. Probate courts across the country follow much the same basic processes and steps, which generally include:
- File the will of the deceased person with the local court
- Notify heirs, creditors, and the public that you are, in fact, dead
- Identify and inventory the assets of the deceased person
- Have the property appraised
- Pay all debts, including estate taxes, if applicable
- Have the will “proved” as valid in court
- Distributing your wealth
The cost of the estate may include appraisal costs, executor’s fees, court costs, the costs of a type of insurance policy known as a surety bond, legal fees, and accounting fees. When you add it all up, the estate can cost 3 to 7 percent of the total value of the estate. And if your estate includes property in more than one state, you may be subject to separate probate proceedings in all applicable states.
The reason for having such a lengthy and expensive process is said to be to prevent property transfer fraud and to protect heirs by quickly settling claims creditors have against a deceased person’s property. The reality is that most property is transferred within a close circle of family and friends and very few estates face potential fraud or creditor claims. Most people don’t need the supposed benefits of succession. Probate is often classified as an expensive process that wastes time.
As an alternative to probate, there are many legal methods to avoid probate altogether. Because bequeathing property in a will generally results in probate, strategies must be put in place to avoid probate. The most common methods to avoid succession are:
- Revocable Living Trust
- Joint tenancy and tenancy by the whole
- Designations payable on death
- Life insurance
- gift planning
Keep in mind that these probate avoidance methods can and should be used together as part of an estate plan. You should already have a pretty good idea of what your estate is worth so you can make smart decisions for your estate plan. Remember that what is right for one person may not be right for everyone. Get a plan specific to your situation and needs by visiting your attorney. Be sure to take the necessary steps today so that you can make a difficult time easier for your loved ones in the future.