“Probate” is one of those words that we all have heard, yet few of us really know what it means. We know it has something to do with dying, but that’s about it. When an individual dies owning assets, there is a process to change the title from the (now deceased) owner, to the new owner. This process is called “probate.” The new owner to whom the assets are passed might be a creditor, a beneficiary under a Will, or (if the decedent dies without a Will) a beneficiary from a slate of “intestate heirs” set forth under the laws of the state in which the decedent lived at the time of his or her death. Many people think that a Will avoids probate. Unfortunately, this is not the case. A Will simply avoids the assets going to the slate of intestate heirs selected by your state and instead passes to the beneficiaries that you designate.
The complexity, cost, and time for probate varies substantially from state to state. Unfortunately, anywhere you own real property you must have a probate. So, even if your state’s probate process is simpler than others, you may have assets in a different state that has a more difficult probate process. In a national survey conducted by the American Academy of Estate Planning Attorneys, probate fees were estimated to average between 1% and 2% of assets. The probate process typically takes about a year, sometimes more, sometimes less. In some instances, a probate can remain open for years due to unforeseen circumstances. For example, in Kravitz v. Levy, the probate remained open for almost 40 years because the executor did not have the probate court close the estate. There was some issue as to whether final distributions had actually been made. In other cases, litigation can keep a probate estate open.
The good news is that the probate process is voluntary. That is to say, if you want to avoid probate, you can simply not own assets in your name at death. That doesn’t mean you have to be penniless! You can put your assets into a legal entity called a Revocable Living Trust. Since the assets are not in your name individually, they do not have to go through the probate process.
More advanced types of Living Trusts offer more than just probate avoidance. They offer a holistic approach to estate planning, called Legacy Wealth Planning. Legacy Wealth Planning focuses not just on the wealth to be left behind, but also on the continuity of your family’s values, and protecting both those assets and values from the outside world.
A qualified estate planning attorney who focuses on Legacy Wealth Planning can help you preserve your legacy for your family.
Mr. Ronald “Chip” Morrison, Jr. is a Board-Certified Specialist in Estate Planning and Administration by Louisiana Board of Legal Specialization and a member of the American Academy of Estate Planning Attorneys. He has been engaged in Louisiana trusts and estate law for the last 16 years. For more information or to attend an upcoming seminar, please call our office at (504) 831-2348 or contact us through our website.
- How to Leave an Inheritance for Your Special Needs Child - March 27, 2023
- Should I Leave Everything to My Spouse? - March 24, 2023
- Why Women Hold the Keys to Successful Estate Planning - March 21, 2023