THE PROBLEM WITH PROBATE
When the majority of people hear the word "probate," they can tell you with certainty that they definitely want to avoid that-but why? Many people don't even know what probate is and fortunately, have not had to experience it for themselves. In fact, probate is the name for the court proceeding through which a judge declares a Will to be valid and appoints an individual, sometimes called a Personal Representative, or Executor, to be responsible for carrying out the administration of an estate. Probate administration allows assets to be transferred from a decedent to that decedent's heirs. The probate process here in Florida has many negative aspects that your family would surely want to avoid.
The most commonly cited negative about probate is the expense. In Florida, to initiate most types of probates, a decedent's heirs must first hire a lawyer. This is a state requirement for all administrations unless very specific factors are met. Under Florida Law, as compensation for administering a probate estate, a lawyer can charge up to 3% of the entire estate value. That is money that your heirs would have been able to keep for themselves had you planned to avoid probate. The Personal Representative is also allowed to take a 3% fee for their services under Florida law. In addition to these fees, there are court costs and can also be fees for the upkeep of the estate throughout the probate process. That probably does not sound like much but when you consider the amount of bills you pay every month to keep your assets in order, and the amount of time that a probate can take, this amount can add up very quickly.
Probate can also be an exceptionally time-consuming process. The most simple of probate administrations usually takes 6 to 8 months. Any sort of complication at all can make the process take even longer than that, up to multiple years. The court-required creditor claim period, which is the mandatory time allows for creditors to file claims against the estate, is ninety days itself. On top of that is the time it takes to find a lawyer, have the necessary family members participate and cooperate, pay off all claims, sell any necessary estate property, and only then, finally get to distribute the assets to the beneficiaries. All the while, the decedent's bills need to be paid and the heirs are getting antsy. The probate process puts those involved at the mercy of the legal system.
Involving the legal system also means that probate is a very public process. Everything that gets filed with the court becomes a part of the public record and gives those outside your family a glimpse into your financial and family situations. The court is now involved in paying off the debts and expenses you accumulated during your lifetime and in determining who rightfully deserves your assets. With the advance of technology within the court system, each probate court has a website, which anyone can search to find out about estate administrations from anywhere in the world.
Proper estate planning will allow you to avoid many of these negative issues. When used correctly, estate planning tools can help you to avoid the probate process entirely. The most common and effective way to avoid probate is through the use of a Revocable Living Trust. Alternative probate avoidance tools can be used, but may have unintended adverse consequences that many people are unaware of. For example, one might read about using joint tenancy, or adding another person's name to your assets, as a probate avoidance solution. However, adding additional people to your property, even if they are your children, lessens the control that you have over your property and increases the chances that it could be passed to unintended beneficiaries.
Probate is expensive, time-consuming, public and stressful on your heirs. It is important to consult an estate planning professional when making decisions concerning your best interest based on your specific circumstances. By utilizing the proper tools and guidance in estate planning, the whole probate process can be avoided and your family will be forever thankful.