Morrison Law Group, PLC

Estate Planning | Business Planning

Attend a Free Workshop SCHEDULE A CONSULTATION

Offices in Metairie & Covington (504) 831-2348

  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • Estate Planning Pre-Consultation Form
    • Reviews
      • Our Reviews
      • Review Us
    • Request a Guest Speaker
    • Succession Pre-Consultation Form
  • Estate Planning
    • Asset Protection
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Incapacity Planning
    • Legacy Planning
    • Pet Planning
    • Probate and Successions
    • SECURE Act
    • Special Needs Planning
  • Medicaid Planning
    • Louisiana Medicaid & Long-Term Care Planning
    • Free Medicaid/Long-Term Care Calculator
  • Business Planning
    • Business Planning
    • Business Succession Planning
    • Family-Owned Businesses
    • Small Business Medicaid Planning
  • Resources
    • Estate Planning Resources
      • Estate Planning Definitions
      • Estate and Gift Tax Figures
      • Estate Planning Reports
      • Estate Planning Checkup
      • Is Your Estate Plan Outdated?
      • Incapacity Planning Definitions
    • Elder Law Resources
      • Are You A Caregiver?
      • Coping With Alzheimer’s
      • Guardianship & Conservatorship
      • Hospice Care
      • Elder Law Reports
      • Elder Law & Medicaid Definitions
    • Newsletters
    • Trust Administration & Louisiana Succession Resources
      • Bereavement Resources
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
    • Families of Children with Special Needs
    • Frequently Asked Questions
      • Estate Planning FAQ’s
      • Trust Administration & Probate Frequently Asked Questions
      • Legacy Wealth Planning FAQ’s
      • Frequently Asked Questions for Families Without an Estate Plan
  • Blog
  • Contact Us

What’s the Big Deal about Probate Avoidance?

November 12, 2020 by Ronald "Chip" Morrison

Are you curious what Jacqueline Kennedy Onassis, universally regarded as one of the world’s most private women, did with her fortune? What about Anna Nicole Smith, Paul Newman, or even Elvis Presley – are you interested in knowing how they distributed their fortunes? Surprisingly, it is relatively easy to find out their dispositive plans for their estates because each one used a Last Will and Testament in their estate plan and a Will must be probated. Documents filed with the Probate Court, including a decedent’s Will, become public record. The desire to keep the terms of their estate plan private is one of several reasons why many people choose to include probate avoidance strategies in their plan.

Probate Basics

Probate is the legal process that is typically required following a person’s death. Probate may serve several different purposes, including:

  • Ensuring the decedent’s assets are all identified, located, valued, and eventually transferred to the intended beneficiaries and/or heirs of the estate.
  • Providing a legal forum for any challenges to the authenticity of a Will submitted for probate.
  • Notifying creditors of the decedent’s death and allowing them the opportunity to file claims against the estate.
  • Making sure all tax obligations of the decedent and/or the estate are satisfied.

Reasons to Avoid Probate

Despite the fact that probate can serve a number of purposes, people frequently plan carefully in their estate plan to avoid probate. Why? Some of the most common reasons include:

  • Privacy – All documents filed during the probate of an estate are available, upon request, to the general public. In addition, notice of the probate of an estate must be published in a local newspaper to ensure all unknown creditors are aware that probate is underway. If you prefer to keep your financial affairs private while you are alive, why would you want those details made public after your death?
  • Delay – Assets that are part of the probate process cannot be distributed to the intended beneficiaries until the conclusion of the process. The time it takes to probate an estate will vary considerably, depending on where the estate is being probated and the size and complexity of the estate itself. All states provide for a reasonable amount of time (typically 4-12 months) within which creditors may file a claim against the estate. The probate of an estate cannot be concluded prior to the end of the statutory claim filing period. Other factors, such as the complexity of the estate assets, the skills and experience of the Executor, federal and state estate taxes or the need to litigate a challenge to the Will can cause the probate process to drag on for months or even years.
  • Cost – Probate involves a number of expenses, all of which are paid out of the estate assets. The Executor, or Personal Representative, who oversees the administration of the estate, is entitled to a fee as are attorneys, accountants, appraisers, and other professionals who assist with the probate of the estate. Professional fees, coupled with court costs and related fees, can add up to a substantial sum. As a general rule, the larger the estate, the more expensive it will be to probate. Keep in mind that every dollar spent on the probate process reduces what is passed down to beneficiaries of the estate.
  • Challenges – In most states, any “interested” person has the right to challenge the validity of a Last Will and Testament submitted to probate. If a Will contest is filed, the entire probate process effectively comes to a halt while the Will contest is litigated. If the contestant is successful, the Will is declared invalid and the court will look for another valid Will to use to probate the estate. If no other Will is discovered, the state intestate succession laws will be used to probate the estate. If the contestant is unsuccessful, the probate process resumes using the Will initially submitted for probate.

How Do I Avoid Probate?

Now that you know why avoiding probate is such a common goal, here are some strategies you can use to help your estate avoid probate.

  • Non-probate assets – Not all assets must go through the probate process. Assets that bypass probate are, therefore, immediately available to be passed down to the intended beneficiary. Along with trust assets (discussed later), some common non-probate assets include certain types of jointly owned property, life insurance proceeds, and funds held in an account designated as “payable on death (POD)” or “transfer on death (TOD).”
  • Testamentary Trust – This is a common tool used by parents with minor children as a way to manage and protect the children’s inheritance until they reach the age of majority. A Testamentary Trust is drafted while the creator is alive; however, it is activated by a provision in the Will upon the Testator’s death.
  • Pour Over Will – A Pour Over Will is frequently used in conjunction with a Trust to ensure no assets are left out of the Trust at the time of the Testator’s death. As the name implies, a Pour Over Will simply directs that any assets remaining in the Testator’s estate at the time of death are to be “poured over” into an existing Trust. This might include assets acquired right before the Testator’s death, personal property that was not transferred into the Trust already, or other overlooked assets.
  • Revocable Living Trust – A Revocable Living Trust is created and activated during lifetime. As the Settlor (creator) of the Trust, you have the ability to name yourself as the Trustee of the Trust and name someone close to you as the successor Trustee. Major assets are transferred into the Trust; however, you continue to control and manage those assets as the Trustee. Because the Trust is revocable, you have the ability to transfer assets in and out of the Trust with ease. A Revocable Living Trust not only avoids probate, but it also makes an excellent incapacity planning tool because your successor Trustee will take over automatically in the event of your incapacity during your lifetime.

If probate avoidance sounds like an estate planning goal you wish to pursue, schedule an appointment to discuss your options with your estate planning attorney.

About Our Law Firm

Morrison Law Group, PLC is devoted exclusively to estate and business planning. We are members of the American Academy of Estate Planning Attorneys and offer guidance and advice to our clients in every area of estate planning. We offer comprehensive and personalized estate planning consultations. For more information or to attend an upcoming seminar, please contact us at (504) 831-2348 or visit us online at www.morrisonlawplc.com.

About the American Academy of Estate Planning Attorneys

This article is written by the American Academy of Estate Planning Attorneys. The Academy regularly publishes articles on various estate planning topics as a free resource to consumers. These articles are intended as an overview of basic estate planning topics and issues, and not legal advice. We recommend that you consult with a qualified estate planning attorney to review your goals.

The Academy is a national organization dedicated to promoting excellence in estate planning by providing its exclusive membership of attorneys with up-to-date research on estate and tax planning, educational materials, and other important resources to empower them to provide superior estate planning services to families in their communities. The Academy expects members to have at least 36 hours of legal education each year specifically in estate, tax, probate, and/or elder law subjects. Since 1993, the Academy has been a highly-regarded and sought-after resource for attorneys and consumers alike, and has been recognized by Consumer Reports, Suze Orman in her book, 9 Steps to Financial Freedom and numerous times by Money Magazine.

By: The American Academy of Estate Planning Attorneys

www.aaepa.com · blog.aaepa.com

  • Author
  • Recent Posts
Ronald
Ronald "Chip" Morrison
Ronald “Chip” Morrison, Jr. is a Board Certified Estate Planning Law Specialist as certified by the Louisiana Board of Legal Specialization. He is admitted to practice before all State courts in Louisiana. He is also admitted to practice before the United States District Court for the Eastern and Middle District of Louisiana.
Ronald
Latest posts by Ronald "Chip" Morrison (see all)
  • 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

About Ronald "Chip" Morrison

Ronald “Chip” Morrison, Jr. is a Board Certified Estate Planning Law Specialist as certified by the Louisiana Board of Legal Specialization. He is admitted to practice before all State courts in Louisiana. He is also admitted to practice before the United States District Court for the Eastern and Middle District of Louisiana.

Morrison Law Group, PLC

Subscribe Our Blog

Download Estate Planning Worksheet PDF Now!

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

Map

Morrison Law Group PLC (Metairie Office)MAP Gabb Morrison LLP (Covington Office)MAP
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • RSS
MORRISON LAW GROUP
law-pay

© 2023 American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy