When many first consider Estate Planning, they immediately think of preparing a Last Will and Testament. While having a Will is slightly better than dying without a Will (i.e., dying intestate), Wills also have some major drawbacks – the biggest drawback being that a Will forces your estate to go through probate.
The probate process includes proving the authenticity of a person’s Will, appointing an executor, identifying and inventorying a person’s assets, paying debts and taxes, identifying heirs, and distributing property according to the Will, or if no Will is available, according to state law. See below for five detailed reasons why probate is such a nightmare:
1. Probate requires frustrating intrusion by the court, lawyers, and the public into a very emotional, private, family time. A judge may have to determine who is a legitimate creditor, and may have to rule on distributions to children and other beneficiaries. Your estate may have to hire a lawyer to shepherd the executor through the legal maze.
2. All of your affairs will become public knowledge. The contents of your Will would be on file in the courthouse, for all to read. And Wills are read. They are read by salesmen, by newspaper reporters, and by the morbidly curious, all seeking in one way or another to take advantage of the publicity required by the probate process.
3. Probate takes time. Unless your executor is absolutely certain that there are no debts owed by the estate (a rare occurrence, since almost everyone leaves some small debts behind) and is willing to accept personal responsibility for your debts, the Virginia probate law mandates that your assets not be distributed for one year after you die, to allow creditors time to petition the court for full payment. Any assets distributed before that time come with a heavy cost for your executor — he or she is personally liable for the repayment of all of this amount, even if the beneficiaries to whom distribution is made have already spent the amount distributed. Thus, your executor will likely be very hesitant to distribute before all debts and taxes are paid. The court, not your family, will supervise and authorize the settling of all debts and the payment of inheritances, in its time and with its delays.
4. On a national average the probate process takes from five to eight percent of your family estate out of the hands of your beneficiaries and gives it to the courts and other outside individuals. Planning with a trust can save the average American family about $30,000 in probate fees, attorney fees, and court costs alone, according to a national study by the AARP. The upfront cost of a trust is only slightly higher than just a will, but the savings in the end always makes the initial expense more than worthwhile.
5. If you are not competent at any time before your death, the trustee of your living trust can serve as the caretaker of your property. This can avoid the expensive and embarrassing public process of a guardianship and conservatorship proceeding, where your children have to prove that you are not able to manage your own affairs. A living trust combined with a power of attorney provides the most complete protection available.
A proper Estate plan, kept up to date, helps minimize delays and costs and can provide for the prompt appointment of executors, guardians and trustees, payment of expenses and taxes, and settlement of claims.
The best way to avoid probate is to consult a Certified Elder Law Attorney, such as Evan H. Farr, CELA to design and implement a fully funded Revocable Living Trust or a Living Trust Plus, depending on your situation. Call The Fairfax and Fredericksburg Elder Law Firms of Evan H. Farr, P.C. at 703-691-1888 to set up an appointment for a no-cost consultation.