We often read about celebrities who die without an estate and how everything they own must go through probate. The article “What to know about probate” from wmur.com explains what that means and what you need to understand about wills, probate, and estate planning.
Probate is a process used to prove that a person’s will is valid and supervise how their estate is handled. It involves a court that focuses on this area. Much about the process depends upon the state in which it’s taking place since these laws vary from state to state.
When someone dies without a will, they have failed to provide instructions for distributing their property. Their assets will still be distributed, but the laws of the state will determine what happens next. The state follows intestacy laws, which outline pre-set patterns of distributing property. In one state, the property will go to the spouse and children. In others, the spouse may get everything.
Other decisions are made for your family when there is no will. If you have not named an executor, the court will appoint someone to oversee your estate. The court will also appoint a person to raise your children if no guardian has been named for minor children. The Court may choose a family member, but it may not be the family member you wanted to raise your kids, or it may be a stranger in a foster home.
Another reason to have a will is that probate can take a few months or a few years to complete depending on where you live. If there is litigation, and not having a will makes that more likely, it would take longer and undoubtedly cost more. While this is happening, assets may lose value, and heirs may suffer from not having access to assets.
Having an estate plan also means tax planning. While the federal estate tax as of this writing is $11.7 million per individual, it will not be that high forever. If the proposals to lower the federal estate tax to $3.5 million per person come to pass, will your estate escape estate taxes? What about your state’s estate or inheritance taxes?
Probate is also a very public process. Once a will is admitted as valid by the court, it becomes a public document. Anyone and everyone can view it and learn about your net worth and who got what.
With all these drawbacks, are there good reasons to allow your estate to go through probate? In some cases, yes. If multiple wills have been found, probate will be needed to establish which will is the correct one. If the will is confusing or complex, probate could provide the clarity needed to settle the estate. If beneficiaries are litigious, probate may be the voice of authority to quell some (but not all) disputes. And if the estate has no money and a lot of debt, it may be the probate court that sorts out the situation.
Every estate is different. Therefore, it is important to speak with an estate planning attorney to have a will, power of attorney, and any health care directives created and properly executed. These documents should be reviewed and revised every few years to keep up with changes in the law and your personal life.
Reference: wmur.com (July 29, 2021) “What to know about probate”