Avoiding Probate

Avoiding Probate

Many people will have their estate go through probate after they pass on. But what is probate? Why should we be concerned about it? And how can we avoid probate? On today’s blog we will answer all these questions and more.

Probate refers to the court proceedings that conclude all of your legal and financial matters after your death. The probate court distributes your estate according to your wishes—if you left a valid will—and acts as a neutral forum to settle any disputes that may come up regarding your estate.

There are a number of problems with the probate process that make it worth avoiding.

First off, the probate process may take a great deal of time. Often, it will take months or even more than a year—complex or contested estates can take even longer. With few exceptions, your heirs will have to wait until probate is over to receive their inheritance.

As for the cost of probate, it can vary from state to state depending on where it is carried out. Though all states require the payment of the court fees (which may only be a few hundred dollars), attorney fees will add significant amounts to this cost. Typically, attorney fees are based no what is reasonable for the tasks at hand. These fees can go up dramatically if the will is contested or when something extraordinary arises.

Depending on your state, probate and administrative fees can take up between 6 and 10 percent of your estate. That percentage is calculated before any deductions or liens are taken out.

Fortunately, there are strategies you can use to help avoid the probate process altogether. A trust may enable you to pass your estate on to your heirs without ever going through probate at all. While trusts offer numerous advantages, they incur upfront costs and ongoing administrative fees. The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional and your legal and tax advisers before implementing such strategies.

To learn more about avoiding probate, click here, or call our office at 201-342-3300. One of our associates will be happy to speak to you.