You have been told over and over again that you need estate planning to help your loved ones avoid probate in Tennessee. The reason always presented is a simple one: probate is costly. That may be true, but in what ways is the probate process costly? This blog outlines several reasons why you may want to avoid probate as much as possible to alleviate the burden for your beneficiaries.
It's True: Probate is Financially Costly in Tennessee
Anything that is filed in court requires the payment of court fees. In Middle Tennessee, the court costs for probate can be as much as $500. But these are not the only costs of probate court. You will accrue attorney fees and, likely, accountant charges as well. Depending on the complexity of your estate, these attorney and accountant fees can stretch to many thousand dollars. Complex estates, contested probates, and will contests demand more of your probate lawyer's time in developing, arguing, and negotiating on your behalf. So the more complex the estate, the longer probate process lasts, and the overall cost continues to increase.
A positive aspect of these fees is that probate costs are usually paid by the decedent's estate, not by the beneficiaries' personal funds. As such, beneficiaries do not have to fork out money from their own pockets to fund the probate process. However, the money indirectly still comes from the beneficiaries since the probate fees reduce the overall value of the estate.
Cash: You Don't Want Your Loved Ones to Go Without It
You want what's best for your beneficiaries, and that means getting their inheritance to them as soon as possible. If you avoid probate, your beneficiaries oftentimes receive cash in hand almost immediately. However, if your assets go through the probate process, then beneficiaries will not be able to touch that money until the process is complete and the assets have been distributed. This process can take months or years, depending on the complexity of the estate.
Even though probate costs are paid by the estate, it is important to make sure your family has cash on hand because they may incur funeral and burial expenses as well as miscellaneous expenses, such as utility bills and mortgage payments.
The Judge: They May Have to Approve Certain Actions
The probate process means a judge and the court will determine the distribution of your assets. This means if a minor inherits, the judge must form a guardianship for the child so that his inheritance will be kept safe until he turns 18. If there is real estate to sell, the judge sometimes must approve the sale. If there are association fees to pay or time share maintenance fees to pay, the judge may have to approve payments for these as well.
Remember: Any little matter can become time-consuming and costly to the beneficiary.
Probate Records: It's All Public
Probate is a state court proceeding, and that means probate records are public records, even after you die. Many people want their finances to remain private, but probate makes much of your information public, including:
- your assets,
- your liabilities,
- your beneficiaries, and
- your personal representatives.
For a $10.00 fee, just about anyone can get a copy of your probate record. Since probate records are public, anyone can see everything in the record. Imagine a relative getting this information and then getting upset about what they find. Or perhaps worse, imagine a business competitor learning your business' financial condition.
When you are creating an estate plan, remember that there are several detriments to probate that can be avoided. Among these are:
- High cost of probate.
- Beneficiaries may need cash immediately to handle your expenses.
- Court must approve certain actions during probate.
- Probate records are public records -- and most likely you don't want your finances public.
Keeping assets out of probate helps your loved ones avoid the courtroom. If you have questions about your estate planning, then contact established probate attorney John Crow online or at 931-218-7800 to learn about the best ways to avoid probate.