If you pass away and have not properly prepared with an estate plan, your assets will fall into probate before they can be distributed to your loved ones. In many cases, probate costs your family time and money they cannot afford when trying to pick up the pieces after your death.
What Is Probate?
Probate is the lengthy legal process of validating your will or estate plan. If you have properties that are not included in the most recent estate plan, the estate will fall into probate.
If your will is too elementary or unclear, your assets will enter probate. If a family member argues that some of the beneficiaries are invalid, the estate will enter probate.
The court does its due diligence to solve any mistakes in the will and disburse the funds to the correct parties. This process takes a considerable amount of time and money.
Why Is Probate So Expensive?
Attorney and executor fees are based on the value of the assets. For example, lawyers can collect 2.5 percent in fees. The executor of the estate can claim the same fee. If you have an estate worth a million dollars, that alone is $50,000 in fees right there.
Other costs associated with probate are:
- Court filings
- Private investigator to track down next of kin
The fees add up very quickly with probate. And the longer the case is open, the higher the cost.
How Can You Avoid Probate?
The most common way to avoid probate is by opening a trust. When you transfer all of your assets to the name of the trust, they are no longer tied to whether or not you are living.
You can leave instructions with the executor of the trust, and the assets will be distributed. Your family will not have to wait to receive their inheritance since the terms of the trust will set clear expectations on when they receive them.
Another way to avoid probate is by naming your beneficiaries and including a letter of intent with each one. Then your family is less likely to argue coercion or manipulation. Always update the terms of your trust with each life change: divorce, death, birth, or marriage.
Is your estate plan conclusive enough to protect your estate from probate? Shoup Legal is here to help. Call (951) 445-4114 or email [email protected] to speak with a member of our team.