One benefit of estate planning is that it allows you to avoid probate. An experienced estate planning attorney can help you understand whether this is an option for you. Discover some reasons below that you might want to invest in estate planning to skip the probate process or make it more tenable for loved ones in the future.
What Does It Mean to Avoid Probate?
Avoiding probate means the assets of the estate can be distributed to heirs and beneficiaries without going through the probate and court process. This requires planning ahead to ensure assets are managed in a way that allows them to pass more easily to beneficiaries without probate.
5 Benefits of Avoiding Probate
Reasons to avoid probate range from saving money and time to protecting the emotions and mental health of your loved ones. Each person’s estate is unique to them, and the most important reasons for avoiding probate can differ by individual too.
Some common reasons are discussed below:
1. To Save Time
Probate is a legal process. It involves court hearings, estate reports, and the potential need for heirs to reach certain agreements. How long it takes to complete probate can vary widely depending on how many beneficiaries there are, how complex the estate is, and whether the heirs engage in disputes.
On average, probate can take anywhere from several months to several years to complete. Meanwhile, the assets in the estate are “stuck” in probate, which means beneficiaries aren’t able to receive and use them.
2. To Save Money
Because probate can be a drawn-out legal process, it can also be expensive. Avoiding probate helps you save money by:
- Saving on attorney and court fees. A probate attorney can help ensure the most positive outcome from probate proceedings, but you do have to pay for those legal services. It may be less expensive overall to invest in estate planning services to protect your interests and ensure your family can avoid probate. Probate also involves court filings, and there are fees and expenses attached to those.
- Avoiding more expensive executor fees. If you set up your estate to pay someone to administer it, the longer it takes to close the estate, the more it may cost.
- Mitigating tax expenses when possible. Some methods that allow your heirs to avoid probate also shelter your assets against taxes.
3. To Keep Estate Details Private
Probate filings are part of the public record. That means in many cases, anyone can look up those records and see detailed information about the assets of your estate and what was passed to heirs.
Families that want to keep their financial affairs more private may want to invest in trusts and other estate planning tools that keep these details out of the public record.
4. To Reduce Emotional Anguish for Loved Ones
A probate process that drags out for months or years can be emotionally challenging for loved ones.
First, there’s the fact that an ongoing probate process means loved ones may have to continually face their grief or deal with things that pull them back into it. For some, a probate process that is still going may hinder emotional healing and closure.
Second, probate can delay when heirs receive assets. In cases where heirs are dependents or simply need the assets or money for something, this can be stressful. For example, you might have young adult children relying on inheriting estate assets to cover the cost of college. If something happens to derail probate processes and stop them from getting their inheritance in a timely manner, they may have to drastically rethink their plans.
Finally, avoiding probate can reduce the estate administration responsibilities for the person you name. If you’re thinking of choosing a family member for this purpose, planning ahead to keep as many assets out of probate as possible or avoid it altogether can reduce time burdens on that person.
5. To Distribute Assets Faster
That brings us to an especially popular benefit of avoiding probate: The methods that keep estate assets out of probate tend to ensure beneficiaries can access those assets faster.
For example, you can put assets in a trust. Those assets don’t go through probate, and beneficiaries can have immediate access to the assets when you pass away. In fact, you might even set up a trust so that beneficiaries have some access to assets prior to your death.
Another example includes the use of joint accounts. If two spouses own a home together or have joint checking accounts, those assets typically automatically pass to the co-owner if one of the individuals passes away. The same is true for payable on death accounts, which include many checking and savings accounts, life insurance policies, pensions, and some retirement or investment funds. If you name a beneficiary on these accounts, ownership of the assets transfers to that person upon your death without the need for probate.
How Can You Avoid Probate?
Avoid probate by working with an experienced estate planning attorney who can help you understand all your options and what benefits each might provide. While you can engage in DIY estate planning and write your own will, you may miss valuable opportunities to save time, money, and stress for yourself and your loved ones in the future. Reach out to Crow Estate Planning & Probate to learn how we can help you avoid those issues and best protect your assets and your family.