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What Is Probate – Definition, Process & How to Avoid It

There are few things as traumatic as dealing with the death of a parent, sibling, or spouse. It is a reality that we will all face at some point in our lives, and when we do, the pain experienced is often exacerbated by the legal issues death often brings. Dealing with insurance companies, locating and reading the will, and coming up with a fair process are a few of the draining but necessary things to handle. Add in money, assets, investments, and contentious family members, and it is no wonder that many families are overwhelmed by this life event. Looming over it all is the specter of probate, a process that few people understand but is crucial in the tying up of your loved ones’ affairs.

Archaic legal terms like “tenancy-in-common” or “joint-tenancy with rights of survivorship” can frighten those without any legal backround. However, probate is simpler than it appears, and preparing for it early can lessen the emotional stress and strain your family will experience when you are eventually faced with the process.

What Is Probate?

In simple terms, probate is nothing more than the process a legal court takes to conclude all your legal and financial matters after your death. Essentially, probate is the process by which a court distributes your estate. If you’ve prepared a will, the court will distribute according to that. Sounds simple, right?

Unfortunately, it’s rarely that easy. But that’s because most people haven’t written a will. If you do not have a written will, then the court and an appointed administrator will decide how your estate will be distributed. And don’t assume for a second that your spouse or your children will automatically get everything or an equal share.

Over the years, while much of the legal system has been made easier and more accessible, the probate process has remained lengthy and complex for people who have not prepared for it, and even to an extent for those who have prepared. If there is no will, or if there are a large number of assets, these problems can be exacerbated. However, you do not have to be rich to encounter problems. Being wealthy adds complications, but the average middle-class family will deal with a number of problems if they do not prepare.

The Problems of Probate

1. Time

The probate process can take a long time. If your heirs need their inheritance to pay for college, immediate medical bills, or other time-sensitive items, then they may have a problem. There are additional expenses with waiting for the probate process as well. For example, if real estate is involved, most likely a mortgage and homeowners insurance need to be paid on a house that no one may be living in. Depending on the duration of the probate process and the amount of the home’s expenses, this problem of time can add steeply to the cost.

The settlement time-frame for many estates is from nine months to two years. Complex or contested estates can take much longer. With few exceptions, your heirs will have to wait until probate is concluded to receive the bulk of their inheritance. But in some cases, by that point, the estate may have exhausted itself simply to cover its expenses.

2. Cost

Nothing in the legal system is free. If the court is working from a valid will, then there will be court costs and fees. If there is no will, or if its validity is being challenged, the price to help administer the estate will be high.

According to the American Bar Association, probate and administrative fees can consume between 6% and 10% of a person’s estate. That percentage is calculated before any deductions or liens are taken out.

3. Lack of Privacy

The proceedings of the probate courts are a matter of public record. Anyone with the time and inclination can go to the courthouse and find out exactly how much you left to each heir and to whom you owed money.

Do not think of this as a trifling matter, just because you may not be wealthy or famous – a spurned ex, reporters, dubious investment advisors, or real estate investors could all get this information and cause you and your family problems. Don’t think that just because you do not have the paparazzi outside your house that no one cares. Probate court leaves your heirs with little or no privacy.

4. Family Squabbles

Many families have been torn apart by the arguments that can erupt after the death of a family member. If there are blended families because of divorce, a large asset base, or family members that do not like or trust the person you choose to be executor of will, there may be a contested will. This is a problem that has nothing to do with the probate legal process, but involves it.

Anyone can contest the contents of a will. If a will is contested, your heirs will have to go to court and retain lawyers. The probate judge will appoint an administrator, and they will meet with lawyers to discover who has a valid claim. At this point, it is like any other court proceeding with witnesses, evidence, and testimony. This will cause the problems of time – and money – to skyrocket. If there is salacious material involved, you can bet your families feud will go public.

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