Probate gets a pretty bad rap for being something that delays beneficiaries from receiving their inheritance and may even eat up considerable funds from the estate. Is there any time when probate court can actually be a good thing? Let’s look at some of the advantages and disadvantages of probate.
The Advantages of Probate
If someone passes away without executing a will or having other estate planning measures in place, probate can really save the day. A few of the advantages include:
- Provides a legal means of redistributing the estate
- Enforces and validates the wishes included in a will
- Cares for remaining debts and taxes so heirs don’t have to worry someone will eventually come knocking at the door looking for money that may have long been spent
- May encourage debt forgiveness due to the window for claims against the estate being short
The Disadvantages of Probate
Here are a few of the reasons most people try to avoid probate with their estate planning:
- Probate is public record, so anyone can look up your financial information
- Executor fees and court costs may cut significantly into the value of the estate
- Probate can keep beneficiaries from receiving funds for weeks, months, or in some cases even years
- Complicated probate regulations can put a huge strain on beneficiaries and especially on the executor of the will
- The courts make the final decisions on your estate rather than you
- The higher the gross value of your estate, the higher the probate fees, making it more cost effective to create and maintain a revocable trust
Southern California Estate Planning Attorneys
Petrov Law Firm has the Southern California estate planning attorneys you can trust to help you develop an affordable and effective plan of action for the future. Contact us today by calling 619-344-0360 to get started.Read More
In California, if you have an estate worth more than $150,000 and no will, the estate has to pass through probate court and will be subject to fees. And probate fees can by high. For example, an estate worth $250,000 will get charged $8,000 in probate fees. The best way to avoid probate court and probate fees is to have a lawyer create a thorough will. And you need to keep that will up to date.
Even if you have an estate worth less than $150,000, you should have a will. Passing away without a will is a good way to create problems in your family. However, if you want to know how to calculate the value of your estate as seen by the probate court, use the following guide for identifying exclusions:
• California does not include any property you own out of state
• You do not include any property with joint tenancy.
• You do not include any community property with right of survivorship.
• You only include half the value of any other community property.
• Life insurance is not considered part of your estate.
• Cars are not included in the calculation.
• Financial accounts with multiple owners are not included in the calculation.
• Assets held in a trust are usually not included.
If you use the general guidelines above and find that your estate is close to the $150,000 mark, don’t risk probate court fees. Hire a lawyer. The money you invest up front is well worth the savings to your estate.Read More
If you die without a will, it’s very possible that your family will have to wait for a probate court to review your assets and distribute them according to state laws. While a will is a good way to avoid probate courts, you can consult with your estate planning attorney to review a few of the other options for you.
Assets such as a 401k, life insurance policy, and an annuity have beneficiary designations. Upon your death, these kinds of accounts generally do not have to pass through probate. The beneficiaries will have to do little more than to prove their identity and show a death certificate to take possession of the asset. Some states allow this same kind of benefit with bank accounts and investment accounts. These can be called a Transfer on Death (TOD) or Payable on Death (POD) account. A life estate deed is an option for avoiding probate for real estate.
Review the legal implications of how you hold real estate. There are several options for how to hold real estate. For example, if your deed says “Tenants in Common” your real estate will have to pass through probate before it can be distributed. You can consult with an estate planner to ensure your assets are properly designated.
Lastly, you can avoid probate by giving all of your assets away before you die. Luckily, you can put a lot of your assets into a trust (there are several kinds) that will benefit whomever you choose during your life and afterward. An estate attorney can help you create the proper kind of trust for you and your family.Read More