Investments
2008-10-01 08:48:00
Is probate evil?
Everyone tells me that I should avoid having my estate go through probate at all costs. Is that the case?
I may be committing an act of heresy, but, in spite of all the horror stories and warnings of dire consequences to those that would actually dare to use the probate process to transfer an estate to one’s heirs, I am not convinced that probate is as evil as people say.
Probate is the court supervised transfer of a person’s property to their heirs. Not all property is subject to transfer by probate, life insurance benefits and other property that has beneficiary designations like IRAs and 401(k) accounts change ownership upon death without the necessity of any official act by a court. Bank accounts and real estate can also have transfer on death status assigned to them. A person’s probate estate consists only of property that is owned without any such transfer designation.What probate does do is provide a means to insure that whoever is entrusted with the duty to administer a person’s estate fulfills their obligations as directed. It is also a place where creditors’ claims against an estate and disputes among heirs can be resolved and, sometimes, extinguished. Probate can take a long time, but that’s usually because a person left their affairs in such disarray or the choice of executor was so poor that delays are inevitable.
So what’s all the fuss? My suspicion is that those that make their living promoting living trusts want everyone to believe that their method is better. In some cases it is. But, before you accept an invitation to attend the next living trust seminar, have an experienced estate planning attorney conduct a thorough review of the property you own. I’d be surprised if you can’t accomplish your goals efficiently and at a reasonable price without a trust. If you’re craving rubber chicken, go to the seminar.
