Your Beneficiaries Go through the Meat Grinder during Probate
Probate is the court process of administering a deceased person’s estate. While it has become a more simplified process since some states have adopted the Uniform Probate Code, it is still to be avoided—avoided like the plague.
Probate is a court process and a matter of public record. Public record means anyone has access to some of the most private information about your family and assets. This is how creditors find the information they need to collect from estates. When you hear about families being left with nothing but debt, that is what they mean.
Additionally, when an estate is probated, there are costs. Fees spent on the attorney who will help settle the estate and fees spent on getting things in order. All of these come as out-of-pocket expenses that often times are reimbursed out of the estate when everything is said and done, but there is no guarantee.
Lastly, the probate process takes a lot of time. Depending on the size of the estate and how much conflict is involved, a probate can take anywhere from six months to years. During this time, the family is unable to completely mourn the death of their loved one and continued family conflict is almost certain. Watch the interview with estate planning attorney Elizabeth Westby on the seriousness of going through state probate.
The person who will be handling the settling of your estate is called a personal representative. This position holds a high fiduciary standard. If you die without a will, the personal representative could be anyone who comes forward and designates himself or herself. Choosing this person carefully is important and can be done through an estate plan. You want to make sure this person knows your wishes, is trustworthy, good with money, organized, accountable and has practical business sense as well as life experience. This is the person who will take inventory of all of your personal property and all of your monetary assets. This is the person who will be responsible for making decisions that will affect the estate as a whole and your loved ones. This is also the person who will divide your estate according to your will, or if you die without a will, according to the intestate laws of the state you died in.
The good news is that probate is 100 percent avoidable. With proper planning and a little time and money spent now, you will save thousands later.
Syndicated financial columnist Steve Savant interviews estate-planning attorney Elizabeth Westby on the basics of estate planning, creating a will and installing appropriate trusts. Right on the Money is a weekly financial talk show for consumers, distributed as video press releases to 280 media outlets nationwide.