When a will is used to as a postmortem asset transfer vehicle, the executor that is named in the document would act as the administrator. This individual or entity cannot act in a vacuum. The will would be admitted to probate, and the court would provide supervision during this legal process.
In California, there is are a couple of caveats to the above statement. Smaller estates that are valued at $166,250 or less can be administered through the utilization of a small estate affidavit or a simplified probate process.
Another exception to the rule would be in cases when a married person is inheriting property from their deceased spouse. These estates can be administered through a streamlined procedure called a Spousal Property Petition.
Though probate is in place to serve certain purposes, it can be a hassle for the rightful inheritors.
When people understand the drawbacks, they often seek to implement probate avoidance strategies. In this post, we will look at four reasons why informed individuals tend to feel this way.
You probably want your loved ones to receive their inheritances as quickly as possible after you are gone. When an estate goes through probate, a waiting game begins. It will take nine months to year for the court to probate an estate, and there are no assets distributed during this interim.
Of course, if there are complications, it can be drawn out even longer. The rather infamous Anna Nicole Smith versus the Marshall family case was stalled in probate for more than 15 years before it was closed.
The Cost Factor
Probate can be a costly process. The executor will be paid out of the assets the comprise the estate, and there are legal fees and court costs. Appraisals and liquidation of property can be necessary, and there are fees associated with these services. An account can be necessary, and there will invariably be incidental expenses.
All of this red ink can add up to consume a noticeable portion of the estate, and it is money that is coming out of the pockets of the rightful inheritors.
There is little doubt that you do not want everyone that may be interested to find out what you had to pass along and how you decided to distribute it. Another major pitfall of probate is the fact that anyone that is interested can access probate records to obtain all the details.
This can be juicy fruit for folks that want to gossip, but the information can also cause hard feelings among people that were in your inner circle. This can damage relationships going forward.
Opens the Door to Estate Challenges
One of the functions of the probate court is to determine if the will is in fact valid. This is a necessary safeguard, but anyone that wants to contest the validity of the will can do so during the probate process.
Granted, in rare instances, this is a good thing. However, in other cases, disgruntled parties enter the picture to muddy the waters. As we have touched upon with the Anna Nicole Smith case, a contested estate can be stuck in probate for a very long time.
Probate Avoidance Strategies
Now you can see why a lot of people decide that probate is something that should be avoided. If you agree, you could use a revocable living trust as the centerpiece of your estate plan. When you go this route, the trustee would be empowered to distribute assets outside of probate.
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