Why is Massachusetts Probate considered a complex process and how can you avoid it?
What is Probate?
Probate is a legal process that happens after a person has died. It is a court-supervised process in which the will of the deceased is validated to allow the assets to be distributed according to the will. Probate court also verifies who the personal representative (also known as an “executor” or an “administrator”) will be as stated in the will or, if there’s no will, the court will appoint a personal representative. The purpose of probate law is to prevent fraud after someone’s death and also to give creditors an opportunity to make claims against the estate.
Is There a Way to Avoid Probate?
Probate in Massachusetts is a lengthy, expensive, and often confusing process. However, our Woburn trust attorney can prepare a living trust (also called a “revocable trust” or a “revocable living trust”) that bypasses probate and ensures your assets transfer to your heirs quickly and without the fees of probate.
The probate process evaluates and inventories an estate’s assets, pays the estate’s outstanding taxes and debts, and transfers what remains according to the instructions in the decedent’s will (or according to the Massachusetts intestate succession laws if there is no valid will).
Why is Avoiding Probate Important?
You’ll want your heirs to avoid probate for three main reasons. You’ll want your heirs to avoid probate for three main reasons. In Massachusetts, an estate must remain open for a year in order to allow creditors and others to file claims. The cost is another reason to avoid the probate process. The cost of probate can significantly reduce the value of a estate. Probate is a public proceeding, which means that everyone can see what your loved one has inherited. If maintaining privacy is important to you, then avoiding probate also becomes important.
What Makes Probate So Complicated and Costly?
Probate consists almost entirely of legal paperwork. In most cases, there is no probate dispute. Therefore, probate rarely requires a lawyer to do research or use courtroom skills. Instead, probate lawyers complete a mountain of paperwork, meet filing deadlines, and satisfy other legal requirements.
If you don’t plan ahead to avoid probate, your estate must pay attorneys’ fees, an executor’s fee, court costs, and additional expenses. Probate is easy to avoid. Alternatives to probate include:
Revocable living trusts
Joint property ownership
- Payable-on-death accounts
- Gifts
- What is a Revocable Living Trust?
- Preparing a revocable living trust is a popular and sure way to avoid probate. A
Massachusetts living trust attorney
can prepare the revocable living trust that is right for you, your loved ones, and your estate.The properties and assets you transfer into a revocable living trust don’t have to go through probate. Upon your death, a revocable living trust lets your trustee transfer those properties and assets to your heirs quickly and without probate interference.In some ways, a revocable living trust is comparable to a will. A living trust is more than just a will. You can name a successor trustee to manage your trust in the event you become incapacitated.
You may modify or cancel a living trust for any reason and at any time. It is important to review your living trust if it has not been updated in the past few years, or if it was created in another state. It also offers the right of survivorship.
However, a surviving owner would then need to do some estate planning, like a revocable living trust, to ensure the property passes smoothly to their heirs.
How Do Payable-on-Death Accounts Avoid Probate?
To convert your retirement and bank accounts to payable-on-death (POD) accounts, you complete a form at your bank and name one or more beneficiaries. You can update a payable-on-death (POD) form during your lifetime. If your paperwork does not indicate otherwise, the assets will be divided equally among beneficiaries. Upon your death, the beneficiary shows the bank a valid, unexpired government-issued photo ID and your death certificate and receives whatever remains without probate interference.
A transfer-on-death (TOD) form allows you to name one or more beneficiaries who automatically inherit the assets in your stocks, bonds, and investment accounts upon your death and without the need for probate. If you do not specify otherwise, the assets will be divided equally among your beneficiaries. You may update a transfer-on-death form at any time during your life.
However, a POD or TOD may inadvertently conflict with your other estate planning documents. In some cases, a will or trust might name one beneficiary of an asset or property while the POD/TOD form names another. In these cases, the POD/TOD account usually overrides the will.
It’s a wise choice to have a Massachusetts estate planning attorney assist you with your estate planning documents to ensure no ambiguities or conflicts.
Can You Reduce the Cost of Probate by Giving Away Your Assets?
- Giving away your assets and properties before you pass away can reduce the cost of probate, saving more in your estate to pass to beneficiaries. The more valuable an estate, the higher probate costs. This idea is not without its flaws. If you need MassHealth’s long-term care insurance, MassHealth will review any large transfers made five years prior to the date of your application. If they find large transfers, then they will impose an eligibility disqualification period, regardless of whether the gift was for a good cause or not. The amount of the gift will determine the length of the disqualification. Penalties can be “cured” by the return of the gift to you.
- What About Smaller Estates?
Smaller estates in Massachusetts may avoid probate or qualify for a simplified probate procedure called “voluntary administration.” A Massachusetts probate court may direct an estate’s executor to transfer the estate’s assets to the heirs without the full probate process in these circumstances:
The decedent was a Massachusetts resident.
The decedent didn’t leave real estate, and the estate’s property is valued at or below $25,000 (excluding one vehicle’s value).
30 days or more have passed since the decedent’s death.
The person who tries to start the legal process (the petitioner) must be 18 years of age or older and an interested person, such as an heir, potential heir, or creditor of the deceased or devisee (person named in a will to inherit real estate). The petitioner doesn’t have to be a resident of Massachusetts.
No other probate proceeding can be pending.
Who Should Prepare Your Living Trust?
Proper estate planning requires wise choices to ensure your instructions are followed and to protect the value of your estate. Matthew Karr is a qualified Massachusetts living estate attorney at the Heritage Law Center. He can provide you with advice and assistance when preparing a comprehensive estate plan or a living will. We know that it is important to protect your assets so they can be passed on to your loved ones with minimal costs and complications. Your first step may be to establish a revocable trust. Call 617-765-9207 to schedule an appointment with our estate planning team. Let us help you protect both your assets and your loved ones.
