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Is Probate bad?

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A lawyer told me probate is no big deal. Is that true?

 

Probate is a court case which protects creditors, then assures that what is left over goes to where state law requires.  The probate process varies from state to state, but nationwide statistics reveal an average cost of 3% to 8% of the value of an estate and an average time of six to twenty-four months to complete a probate.  In addition, if you own assets in more than one state, your estate may face a probate in each of those states.

 

Probate court raises issues of privacy, control and predictability.  A probate case is traditionally a public case with notice inviting creditors to file claims published in the newspaper and court records available for anyone to examine.  One probate attorney has said of the process, “You never know who will show up in court— creditors, predators, in-laws, and outlaws.”  A Revocable Living Trust (RLT) is a private document controlled by the successor Trustee you choose during your lifetime.  With a Revocable Living Trust, no one sees the documents except in limited situations controlled by your trustee, and then only in confidence.

 

Probate court raises issues of the immediate availability of assets.  By avoiding probate, beneficiaries can receive assets shortly after death or at any time you specify in the RLT.   Beneficiaries do not have to seek permission from a judge to use assets you intend for them to have.

 

Probate court protects creditors first.  Even claims you would deem unreasonable may be made against your assets after your death.  A well drafted RLT may offer after- death protection against claims your trustee deems unreasonable.  In addition, a two-trust plan for a husband and wife may protect one spouse's assets from the creditors of the other spouse during your lifetime.  Also, unlike the approach of owning assets jointly with children used by some, an RLT offers the same probate avoidance while not losing any control over the assets and not exposing you to the risks of taxes and claims of your children’s creditors which could result from joint ownership with children.

 

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