When you pass away, your estate will likely go through probate, a legal procedure designed to distribute your assets, settle your debts and dissolve your estate. Unfortunately for your heirs, probate can often be a complicated and costly process.
- The first thing that will happen after you die is that the probate court must declare the Will to be valid. This is often straightforward unless someone wants to contest the Will on the basis of an accepted challenge such as fraud, undue influence, or incapacity.
- The next step in the probate proceedings will be to identify all your property and assets by creating an inventory. Your executor will then have all the assets appraised.
- After all of the property is accounted for and the value of the property has been established, all debts and taxes will need to be paid. This can be done with funds you have set aside or if enough funds are not available, your executor can sell off a portion of the assets to cover the outstanding debts.
- Once all of the estate’s debts are settled the probate court will then approve the distribution of the assets that are left to the people or organizations that are named in the Will.
- If there is no Will, the court will decide who inherits based on state laws.
While this process sounds fairly straightforward, it can be a nightmare for your loved ones. If there is no Will, a personal representative will have to be appointed by the court to perform the duties your named executor would normally perform.
This person may or may not be someone you would have chosen.
In addition, any property that has to be sold to pay off debts is property that is no longer going to your heirs. This can cause some distress if the asset in question is a valuable family heirloom.
Even with a Will, probate can still be a lengthy and expensive process. The average probate can last up to a year, sometimes more and of course, the expense will continue to rise, the longer it lasts.
There are a number of ways that you can avoid probate and the cost associated with these legal proceedings. One of the easiest methods of avoiding probate is by establishing a revocable Living Trust. Any assets held within the trust are not legally owned by you as an individual so when you pass away, probate is avoided and the assets can be passed to your heirs easily.
To learn more about a Living Trust, contact our office today.
- The Inflation Reduction Act - September 13, 2022
- How Do I Trust Thee…Part II - July 1, 2022
- How Do I Trust Thee…Part I - July 1, 2022