As you look into the topic of estate planning you will invariably see mention of probate avoidance strategies. Many newcomers to the subject don’t even know what probate is, much less why they should try to avoid it, so we will provide a basic definition and take a look at the three most common reasons why people do indeed choose to avoid probate.
Probate is the legal process of estate administration, and during this interim the probate or surrogate court attests to the validity of the will and supervises the administration of the estate. So if anyone wanted to contest the will they would do so before the probate or surrogate court. Probate provides transparency to the heirs of the estate as well as the executor conducts transactions, and this could be considered a positive.
On the other hand, since probate is indeed an open proceeding the disposition of the estate becomes a matter of public record and some people would prefer that their affairs remain private. In addition, when you draw up your will, you probably don’t want anyone to contest it; probate opens the door to will challenges, so this open forum that probate provides is not necessarily all good. And this is one of the reasons why people avoid it.
Probate can also be expensive. The court itself charges a fee, and the executor is entitled to remuneration for his or her time and expertise. The executor will have to bring in a probate attorney, and in many cases he or she will have to engage the services of an accountant, an appraiser or appraisers, and/or an estate liquidator, and of course all of this comes with a significant price tag.
And finally, the process of probate is not a brief one. It can take anywhere from several months to multiple years in some cases for the estate to be probated and closed. The heirs to the estate will not receive their inheritances until the process of probate has run its course, and this time lag is another reason why many people choose to implement probate avoidance strategies.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.