Why Do People Avoid Probate?

The process of probate would enter the picture if you use a last will to state your final wishes. It would be admitted to probate, and the court would provide supervision while the executor completes the administrative tasks.

Final debts are paid during probate, and the court determines the validity of the will. Once everything is in order, the executor can distribute the assets that comprise the estate to the inheritors that are named in the will.

All of that may sound innocent enough, but there are some drawbacks that go along with the probate process. We will look at a few of them before we get into probate avoidance strategies.

Probate Can Be Costly

There are expenses that accumulate during probate. These expenses include legal fees, accounting charges, court costs, appraisal charges, and liquidation fees. All of the expenditures are essentially coming out of the pockets of the rightful heirs to the estate.

Time Consumption

Creditors are given a certain amount of time to come forward. In some cases, the executor will have a lot of tedious work to do before the assets can be distributed. Depending on the jurisdiction, it will typically take at least eight months to a year for probate to run its course.

No inheritances can be distributed while the estate is being probated by the court. This can be an inconvenience for some inheritors, but for others, the waiting game can be quite troublesome.

Loss of Privacy

Probate is a public proceeding, so interested parties can access probate records to find out how the resources were distributed. Most people would prefer to keep this information confidential.

Probate-Free Transfers

There are some types of asset transfers that organically take place outside of probate. Life insurance distributions are not subject to probate. In addition, property that is held in joint tenancy would be not go through probate.

The beneficiary of a payable on death account would assume ownership of the account upon the death of the primary account holder. The court would not be involved with these types of assets.

Revocable Living Trusts

The most commonly used probate avoidance tool is the revocable living trust. When you establish this type of trust, you can act as the trustee and the beneficiary while you are alive. You would name a successor trustee to administer the trust after your passing. Your heirs would be the beneficiaries.

You can leave instructions in the trust agreement with regard to the nature of the distributions that the beneficiaries will receive. If you don’t want the trustee to pay out lump sums all at once, you could instruct the administrator to distribute limited assets over an extended period of time.

The probate court would not be in the loop, so the beneficiaries would receive their inheritances in a timely manner.

Attend a Free Seminar

We are conducting a number of seminars over the coming weeks, and you can learn a great deal if you attend one of these sessions. There is no charge to join us. However, we ask that you register in advance so that we know how many people to expect. To do just that, visit our seminar page and click on the date that works for you to register.

Schedule a Consultation Today!

If you have already learned enough to recognize the fact that you should put an estate plan in place, we are here to help. Each case is unique, and there is no one universal approach that is right for everyone. This is why personalized attention is key, and that’s exactly what we provide.

To schedule a consultation at our Oklahoma City location, you can give us a call at 405-843-6100, and the number for the Tulsa office is 918-615-2700. You can alternately use our contact form to send us a message.

 

 

After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.

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