After you pass away, your family will need to go through probate to validate your will. Once everything is verified, your assets can be divided according to your intentions. The benefit of probate is that it will clarify your will to your family, making sure there are not any misunderstandings or arguments about what you desired. Unfortunately, there are some myths about probate that you may have heard and believed yourself.
All Estates Go Through Probate
If you have a will, then probate will be necessary for verification of the will and dividing assets. However, there are alternatives to having a will if you do not want your family to go through probate. One way to do this is through living trusts, which make the assets in the trust no longer individually owned. Assets will be held by the trust, or they will have a beneficiary that you designate. Using a living trust can be much easier than a will, as it makes distributing assets very smooth.
Another exception would be if you do not have any assets that are documented, and you do not have a will. Of course, it will be up to your family to decide what happens with your personal property, but probate will not be necessary.
Going Through Probate Will Lead To Receiving An Inheritance
Many family members expect to receive somewhat of an inheritance by going through probate. This is not always true, especially if the debts that you owe are more than the inheritance you planned on leaving behind.
If you are able to make your family aware that you have too many debts, you can save them the hassle of going through probate. It would not be worth it if you are certain there is no inheritance in the final outcome.
Probate Will Take A Long Time To Go Through
The larger an estate is, the longer probate will take. Court fees, attorney's fees, accounting fees, appraisal fees, and even bond fees will minimize your family's inheritance. You can limit the length of the probate process by reducing the size of your estate prior to your death.
Trusts have already been discussed as one option, but you can also give assets away through custodial accounts or gifts. Each year you are allowed to give up to $14,000 to family members without worrying about the consequences of taxes. Make sure to plan accordingly.
Now that you are aware of a few myths about probate, you can prepare yourself for what your loved ones will have to deal with after you pass away. If you have specific questions about probate or the inheritance process, contact a lawyer with a firm like Gruber & Associates, PC.