Common Myths about Probate
Probate is the process of proving a will. The courts determine whether or not a will is valid. Then the court oversees the disposition of assets in accordance with the will. Let’s cover a few of the most common myths about probate.
Myth 1: The Reading of the Will Occurs in Probate
This trope is perpetuated in novels and television shows, but it does not happen in real life. Your family is not going to be gathered together after your funeral to hear what you want to happen to your property much less be ordered to go to court to hear it read.
Your will and testament will be read by relatively few people unless your estate goes to probate, too. When things hit the courts, it becomes a public record. You can minimize the risk of going to probate by having a well-written trust and keeping it up to date.
Myth 2: Probate Is Expensive and Dangerous
The biggest problem with probate is that it is a legal affair. You have to pay legal fees and go to court, and the heirs may not have the money to get good legal advice. This can create problems for a surviving spouse who needs to pay the bills while the financial accounts are locked upon your death. Note that you can reduce the risk of this happening by making some bank accounts payable to family members upon your death or making them co-owners of the account.
Probate can become expensive and trigger family feuds if heirs are fighting over assets. That is a good reason to draw up a will and/or trust while you’re in good health. But even if it went to court, most probate cases are resolved in months, not years. The rare exceptions involve millions of dollars or ongoing income that people are willing to fight over.
Myth 3: A Will Prevent Things from Going to Probate
A will won’t prevent things from going to the property. For example, a will written in a state that practices common law may become invalid if you move to a community property state like Arizona. If you write a will in Minnesota and then marry someone in Arizona, your will is essentially null and void because your surviving spouse will receive most of your assets. A new spouse left out of your will could certainly challenge it, forcing your estate into probate. In many states, they have a right to an elective share of the estate. The longer you were married, the greater that elective share will be.
Furthermore, a will can be contested on other grounds. For example, a will written after a dementia diagnosis could be challenged on the grounds that you were not of sound mind. Old wills may be open to a legal challenge because they contain now unacceptable terms.
Myth 4: If I Don’t Have a Will, the State Takes Everything
That only happens if you have no heirs. That’s actually pretty rare. The executor is obligated to pay off your debts first and foremost. The remaining property will be divided among your heirs. If you haven’t written a will, the assets will go to your surviving spouse and/or children. If you have never married and don’t have children, your asset may go to your siblings, your parents, and even more distant relatives.
A common problem is failing to identify primary and alternate heirs in a will. For example, if you name your sibling as your only heir, the state will give that person’s children their share of the estate if they die. But if you don’t name your siblings and provide information to track them down like a Social Security Number, then the assets meant for them may go into an unclaimed money fund. That money will eventually go to the state. You can prevent this by naming an heir and a clause that assets will go to their children or someone else if they die before you do.
Or name a charity as a beneficiary. You can even set up a residuary beneficiary, whether this is a person or a charity. This is a way to ensure the state doesn’t take assets you acquired before you died but didn’t add to your will.
Myth 5: Probate Will Eat Up the Estate
This is rare, though heirs may not receive an estate for other reasons. For example, it is possible that your debts exceed your assets. In this case, your heirs will get nothing after the creditors are paid. It is very common for medical bills and eldercare costs to eat up an estate prior to someone passing. Then probate is a legal argument over who gets what little is left. Fortunately, most states don’t go through probate.
What if they do have to go through probate? For small amounts of money or items worth relatively little, there are probate shortcuts. For example, there are accelerated processes for passing on the title for a car left by the deceased. This has the side benefit of making trust management much simpler. You might put the trust in the title of your home, but you don’t have to do so with your car and boat.
Myth 6: My Spouse/Child Will Be the Executor
You should name both primary and alternate heirs and executors. You’ll guarantee a probate fight if the only person named as an executor is left incapacitated by a stroke or dies before you do. Nor do you want the courts to name an executor if you don’t want them to default to your spouse or oldest child.
You can name almost anyone to be the executor of your estate. This could be a friend of the family, a relative, or a Probate attorney.
Myth 7: I Should Draw Up My Own Will or Trust to Save Money
Too many people pay for expensive trusts to avoid probate, though it is rarely much of a hassle and further minimized with a good estate plan. Yet there are many people who try to save money by writing their own will, or worse, a trust.
Online software may not give you a valid, state-specific estate document. It can’t give you legal advice that is tailored to your specific situation. For example, it won’t help you re-title assets to move them into a trust set up to avoid probate or reduce the size of your estate. It certainly can’t advise you on minimizing or paying estate taxes.
To learn more about structuring your assets in a guaranteed estate plan, contact our office today at (480) 418-8448. We offer services for clients throughout Arizona, including Chandler, Gilbert, Sun Lakes, Tempe, Phoenix, Mesa, Scottsdale, and Apache Junction.