I often get questions about probate, the legal process that occurs after someone dies to administer their property and estate while also seeing that all expenses are paid. While it’s a common process, it seems to generate a lot of confusion. In an effort to provide more clarity, here are a few probate myths “debunked” so you can better understand what to expect if you are ever involved in the probate proceedings.
Myth #1: Probate Court takes a certain percentage of your estate.
The answer to this is an unequivocal no! In fact, Probate Court fees are charged at a flat rate depending on the type of document filed, regardless of the estate’s value. Attorneys will also bill fees, usually hourly and typically approved by the court. The Executor can also take a fee set by state law, which is based on a percentage of the probate and non-probate property and income, but these fees are typically waived.
Myth #2: Probate takes years.
Factors that can affect the length of probate include complexity, challenges to the Will and notification of creditors. A general rule of thumb that I tell my clients is that the more valuable the asset, the longer the probate process. Typically if probate concerns a single person and an estate less than $35,000, or a surviving spouse with an asset less than $100,000, the probate process will be simplified and less expensive. For example, if I pass away and I have an asset worth $75,000 with only my name on it, my husband can apply to the Probate Court, show that he’s my spouse and then ask for the authority to take it through what’s called a Release from Administration.
In these circumstances, the probate process can be as short as a few weeks to a couple of months. But even more involved probate cases tend to complete within a year from filing the initial to the final paperwork. However, no assets can transfer to a beneficiary within 6 months of the decedent’s date of death. This is because unsecured creditors have six months from this date to file a claim against the estate.
The greatest factor in determining the probate timeframe is how quickly an asset will sell. For example, cash in bank accounts is easy to access and real estate tends to sell quickly. What really bogs down probate is when heirs are fighting. Disagreement among family members can bring the probate process to a standstill. Otherwise, when you’re just looking to grant an Executor authority to sell the house or a car, or to liquidate a bank account, it’s much quicker. When people fight over Wills or over what is being done within an estate, the entire process turns into a nightmare.
Myth #3: If you have a Will you don’t go through probate.
I often get a surprised look from my clients when I say a Will doesn’t keep you from probate. What determines if an asset needs to be probated is if the asset has a living joint owner or beneficiary. With neither of these, the Probate Court needs to step in to give an individual (the Executor) the authority to take control of this beneficiary-less asset. When you have a Will, you predetermine the Executor and to whom that asset will be distributed.
Having a Will ensures the Decedent’s wishes will be met and makes the probate process simpler. Taking time to do estate planning is the best way to save time and money spent on Probate Court.
If you need help with estate planning or have other questions about probate, contact me today to set up a time to chat.