Probate—now there’s a term no one likes to see rearing its ugly head. When discussing estate plans and wills, the word probate comes up often, but what is it, exactly? And, perhaps more importantly, how can it be avoided?
Probate is the period of time following someone’s death during which their estate is locked. This means the validity of the will must be proven or a determination of heirs must be made by a court of proper venue. Sometimes this occurs because relatives or heirs are arguing over an estate, or contesting a will.
The duration of the probate period will vary from state to state. In the eager-to-please middle states, probate may only last a few months and might only have a few associated fees. However, if you venture out into the more popular eastern and western regions, probates often take up to a year and may come with exorbitant fees that exhaust most of the estate assets.
When I first started my practice, I was an eager young attorney ready to prove myself to the world. I was hired to represent a stubborn man in a probate matter. The first hearing was heated and Judge Copeland kindly heard my arguments. After listening to both sides, he spoke to our clients, saying, “If you two don’t sit down and work this out, then these two lawyers will get all the money.” Walking past me, my client went straight over to his sibling and worked everything out in ten minutes.
In truth, hired lawyers are not the best choice when it comes down to resolving a family dispute. We are programmed to fight, not resolve. In a contested probate, the attorneys will win. Not you.
Creating a trust can help you avoid probate; it’s as simple as that. And, as an added benefit, during probate, the estate is opened up to debt collectors. I have had clients who, upon losing a loved one, never even realized that their spouse had a credit card on which almost $20,000 was owed. When left with an inheritance of only $40,000, the remaining money went entirely towards paying off this type of debt, the probate fees, and taxes.
By creating a trust, you are not necessarily evading debt collectors, but trusts ensure that knowledge of the estate is not made public. There is no notice disbursed to potential creditors, and thus it is less likely that debt collectors would come knocking at the door. Granted, it is up to the trustee to pay all debts, but some debts, especially older ones, may not be on the trustee’s radar. If the trustee is unaware of certain debts, how could they be expected to pay it?
Probate also opens the estate up to litigation. When it comes to litigation over a will, the burden of proof falls to the person offering the will for probate. As we all know, courtesy of the slew of courtroom-based dramas on television, bearing the burden of proof is not the most desirable position to be in. However, when dealing with a trust, the burden of proof falls wholly on the contestant. For this reason, we rarely see trusts challenged. Between the time and money required to litigate and the difficulty in proving their case, most people opt to let it go.
Cindy Galvan, my paralegal and current law student, taught me a valuable lesson about how to handle people in the probate process. Many years ago, my client, an elderly gentleman whose son had just passed, was struggling with his emotional state. He began to curse, scream and name call. Cindy handled the situation very professionally. Looking back on the situation, she says, “When I learned that this man had lost his son, I could only think about losing my son and how I would be feeling.” If you find yourself in a difficult probate situation, either with a family member or other loved one, remember to be kind, because everyone is fighting their own private battle.
If you need help with creating a trust or other estate planning documents, contact Willingham & Galvan, PC.