People often come to us with a desire to create an estate plan that avoids probate, the court process of transferring assets from a deceased person to that person’s beneficiaries (the people named in the deceased person’s Will or the heirs at law if there is no Will). However, they don’t always know why that’s something they should want. Here are five reasons to avoid having your assets pass through probate.
- Probate Takes a Long Time
Under Massachusetts law, creditors have a whole year after someone dies to make a claim against that person’s estate. What this means is that probating someone’s estate takes at least a year to complete. Waiting for a year can be extremely difficult when there are dependents waiting on access to the deceased person’s financial assets or real estate.
The courts are also very busy with their dockets and are often quite slow at responding. This means that it may take a while to even appoint someone as Personal Representative (previously called Executor) of the estate. This can be particularly frustrating because the estate is unable to pay final costs, taxes, and lawyer fees until someone is appointed as Personal Representative and has access to the estate’s accounts.
2. Probate can be Expensive
Probates in Massachusetts are not particularly simple or intuitive. Most people will need to hire an attorney to help them navigate the process and fill out the forms correctly. What makes probate particularly expensive though is when the Personal Representative runs into any friction with the court. For instance, if the estate needs to sell real estate before the year is up, they may be able to do so if they petition the court, but this requires a lot of back-and-forth between the attorney and the court. If any of the beneficiaries of the estate push back on the Personal Representative’s actions, this can also create additional work, thus creating additional attorney’s fees.
3. Probates are Public
As part of the Probate process, the Personal Representative needs to tell the court the approximate value of the estate, including the value of any real estate, say who the beneficiaries are, and detail which assets each beneficiary is getting. The value of the estate, the beneficiaries’ identities, and the distribution of assets then become accessible to the public.
In movies and TV shows, this can reveal hidden affair children or dramatic disinheritances. For most people though, this is just an issue of privacy. Do you want everyone to know which charities/organizations you supported? Do you want everyone to know that you gave more money to your favored niece than to her siblings? Having privacy regarding these matters by using a Trust can lessen familial drama after you pass away.
4. Probates are More Easily Contestable
All legal documents can be contested in theory. However, Wills are particularly prone to being contested. Besides Wills being publicly accessible, all heirs at law are given notice of the probate at the beginning as part of the procedure. These two factors combine to create an environment where jilted beneficiaries are given the information and venue they need to contest.
Trusts, unlike Wills, are not publicly accessible and do not require notice to heirs at law. This makes it difficult for disgruntled family members to know the contents of the trust or how their treatment under the trust compares to other parties.
5. Probates Require Court Supervision
Probate is inherently a court process, and the judge is in their power to add extra supervision over a probate. The most common form of this is a Guardian Ad Litem, which is a person appointed by the court to act in the interest of a minor child or otherwise incapacitated person. Guardians Ad Litem must conduct interviews and make formal reports which can be slow and expensive. Courts can also demand bond be paid, searches for potential heirs at law be conducted, and accountings for the estate be completed, all of which add to the time and expense of probate.