Although having a will is a good basic form of planning, planning with a will involves some drawbacks. A primary drawback is that a will does not avoid probate. If you own property such as a house, car, bank account, investment account, or other asset in your name only and you have not completed a beneficiary, pay-on-death, or transfer-on-death designation, probate will be necessary in order to transfer the property to the next beneficiary/owner. A will simply lets you inform the probate court of your wishes. Your loved ones still have to go through the probate process to make those wishes legal.

Here are three key reasons why you may want to avoid probate, if at all possible.

1. 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, pay your bills, file any remaining tax returns, and distribute your money and assets 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. Most people prefer to keep this type of information private, and the best way to ensure discretion is to keep your affairs out of probate.

2. It is expensive.
The costs of probate include court fees, attorney’s fees, executor fees, and other related expenses. The combined costs of probate can easily reach into the thousands of dollars, even for small or simple matters. These costs can easily skyrocket into the tens of thousands or more if family disputes or creditor claims arise during the process. Your money and assets should be going to your loved ones, but if it goes through probate, a significant portion could go to legal fees and the courts instead.

With proper planning, you can avoid the costs of probate. While there is some cost to set up a proper plan, in the long run, comprehensive planning that avoids probate proves to be more cost effective than options that involve probate.

3. It can take a long time.
While the time frame for probating an estate can vary by state and by the value, amount, and complexity of the deceased person’s accounts and property, probate is not a quick process. It is not unusual for probates, even seemingly simple ones, to take six months to a year or more. During the process, your beneficiaries may not have easy access to the money and property you intended to leave them. This delay can be especially difficult for loved ones experiencing hardship who might benefit from a faster, simpler process, such as the living trust administration process. Bypassing probate can significantly expedite the disbursement of money and property so that beneficiaries can benefit from their inheritance sooner.

If you have property located in multiple states, a version of the probate process must be repeated in each state in which you hold property. The multiple proceedings can cost your loved ones even more time and money. However, with proper trust-centered estate planning, you can avoid probate in all of the states, simplify the transfer of your financial legacy, and provide lifelong tax savings and asset protection to your family.

To learn more, please call to schedule an appointment. We will be happy to help you with your planning.