- What are the Negative Aspects of Probate?
Have you ever wondered what will happen to your estate (Assets) after you die? How long will it take your loved ones to receive the
estate (assets) you have left them? Will each receive all that you have left them?
If you are like most people, your estate will go through a lengthy probate process.
What is Probate?
Probate is the court supervised legal process that includes determining the authenticity of your will, gathering your assets, paying your
debts, taxes, identifying and inventorying the your property and the expenses of will administration. Probate involves paperwork and
court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who
inherit the deceased person's property, and then distributing the remaining assets to those persons entitled to them.
How does the probate process work?
Example: After death, the executor – a person chosen by you or the person appointed by a judge -- files papers in the local probate
court. The executor proves the authenticity of your will and presents the court with lists of your property, your debts, and who is to inherit
what you have left. Then, relatives and creditors are officially notified of your death.
Your executor must find, secure, and manage your assets during the probate process. Depending on what is specified in your will, and
on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For
example, if your will makes a number of cash gifts but your estate consists mostly of valuable artwork, your collection might have to be
appraised and sold to produce those cash gifts. On the other hand, if you have many outstanding debts, your executor might have to sell
some of your property to pay what is owed. Eventually, the court will grant your executor permission to pay your debts and taxes and
divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
There are a number of problems with the probate process that make it worth avoiding. The probate process can take a great deal of
time. The settlement time frame for many estates is from nine months to two years. Complex or contested estates (usually between
family members and or debtors) can take much longer. Beneficiaries of the inheritance most likely will have to wait until probate is
decided upon to receive the inheritance.
The proceedings of the probate courts are a matter of public record. Anyone can go to the courthouse and find out exactly how much
each beneficiary was awarded and to whom money is owed.
Fortunately, there are strategies you can use to avoid the probate process altogether. Proper estate planning could enable you to pass
your estate to your loved ones privately, without undue delay or expense.
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Note: The information provided here is to assist you in financial planning and understanding life insurance. The information
in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax
penalties. You are encouraged to seek tax or legal advice from a professional and licensed tax or legal advisor.
As with most financial decisions, there are associated expenses with the purchase of life insurance. Policies commonly have
contract limitations, fees, and charges, which can include mortality and expense charges. Most have surrender charges that
are assessed during the early years of the contract if the contract owner surrenders the policy; plus, there could be income
tax implications. Any guarantees are contingent on the claims-paying ability of the issuing company. Life insurance is not
guaranteed by the FDIC or any other government agency; they are not deposits of, nor are they guaranteed or endorsed
by, any bank or savings association.
in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax
penalties. You are encouraged to seek tax or legal advice from a professional and licensed tax or legal advisor.
As with most financial decisions, there are associated expenses with the purchase of life insurance. Policies commonly have
contract limitations, fees, and charges, which can include mortality and expense charges. Most have surrender charges that
are assessed during the early years of the contract if the contract owner surrenders the policy; plus, there could be income
tax implications. Any guarantees are contingent on the claims-paying ability of the issuing company. Life insurance is not
guaranteed by the FDIC or any other government agency; they are not deposits of, nor are they guaranteed or endorsed
by, any bank or savings association.
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