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Avoiding Probate

Most of our clients tell us they want to avoid probate. They don’t know what probate is but they want to avoid it. They have heard rumors that it is expensive, time consuming, stressful and best to avoid. Many have read that everyone should have a trust because trusts avoid probate. First, what is probate?

Probate is the process of dealing with the bank accounts, stocks, cars, real property and other assets that a person owned just in their name when they died. The asset had no person named to receive it at death. The probate process answers the question “who is entitled to this asset now that the person is no longer living”. Legal papers are filed with the Probate Court asking the Probate Court to authorize access to the assets to sell them, use them to pay bills and transfer to beneficiaries. Without the Probate Court’s written authorization, you may not be able to deal with them. The Probate process can be intrusive to the private administration of a person’s estate not to mention expensive and time consuming.

Avoiding or minimizing probate is a good planning goal. But in many instances, probate is not the major problem. If you were to look closely at the probate horror stories we hear about, the real problems and expense are usually dealing with issues such as unhappy beneficiaries hiring attorneys to sue the Estate or other beneficiaries, creditor or IRS problems, will or trust contests, or more common, people dying and leaving a mess for the family to clean up and deal with. Focusing on avoiding probate while ignoring other issues can simply leave a disaster waiting to happen.

Probate can be avoided or minimized by using various planning tools such as joint ownership with rights of survivorship, beneficiary designations, transfer on death (TOD) or paid on death (POD) accounts which are also just beneficiary designation arr1angements or other similar methods. Revocable living trusts are also a good planning tool for many people in appropriate circumstances but in Florida they do not necessarily avoid probate. We tell clients they can certainly minimize the probate process and expense and allow much of the administration of the estate to be completed privately.

Usually overlooked is avoiding guardianships sometimes referred to as living probate. A guardianship can be much more work and stress on the family not to mention a lot more costly than probate. It can cause a loss of control over family assets and drag on for years with the probate court supervising and in control. Avoiding guardianships should be as important if not more so than avoiding probate.

We provide estate planning for all our clients whether they have a lot or a little. Good planning can help clients organize and arrange their affairs to make it easier and less costly for their family to pick up and carry on when the client falls down (either disability or death). It should do more than just avoid probate. Good planning needs to minimize family arguments provide clarity on what you want your family to do and anticipate problems and design solutions. Avoiding probate can be good but don’t use this as an excuse not to plan well for your family.