What Factors Set The Stage For A Probate To Occur?
The most common factor for a probate to occur is that someone passes away and the family wants to divide the assets. Usually, the trigger is someone wants to change a deed to a home, or take out a loan against it. You can’t do a reverse mortgage unless the deceased’s name has been cleared from the deed. Another factor that many people don’t realize is bank accounts get frozen upon death if you don’t have a beneficiary on them. If you don’t have a will, we’ve got to go through the intestate process, where we have to appoint another attorney, and it requires extra hearings. If we do have a will, then it’s much more simple. We go in front of a probate judge, ask the client a few questions, and get them appointed with the power to transfer the assets.
What Are The Top Misconceptions People Have About The Probate Process?
The number one misconception about probate is that if you have a will drawn up, you don’t have to go through probate. In fact, wills are designed to go through probate. A lot of people don’t realize that, which is scary because you only have four years to take a will to probate court before it becomes invalid. A lot of times I have elderly clients who come in seeking help because their spouse passed away and they didn’t know they needed to go to probate. Four years have passed from the time that their spouse passed away and they never did anything with the will. Many times, I have to tell them that even though the will would have left everything to them, now the kids own the assets because the will is invalid, which is a harsh consequence. Sometimes, step kids own the property and they want their half of the estate. Long story short, if you have a will, you still have to go through probate and probate that will.
Another misconception about probate is that it’s extremely time-consuming and expensive. If you don’t have a will, sometimes it can take up to 18 months. But if you do have a will, unless someone is contesting it, it usually takes two to three months to get you appointed as executor. At that point, you have the power to access to the assets and we can take great care of you from there to finish the process easily and quickly. It’s not quite as bad as everyone thinks it is if you are working with a good probate attorney who knows how to get your case finished quickly.
Is Probate Always Necessary?
Probate is not always necessary. A lot of times it is necessary in order to transfer assets, but very frequently in my estate planning practice I will draft revocable living trusts for the purpose of avoiding probate. If you have your assets in a revocable trust, you still have full control over them. When you pass away, there is nothing outside of your trust, so you don’t have to go through probate because whoever you picked as your successor trustee still has complete control over them. Another tool I often use is a transfer on death deed. If there are no assets, then there is nothing to pass through the probate system.
Sometimes, it doesn’t make sense for a family to go through probate because the debts are so much higher than what the estate is worth. Most people don’t realize that if you are on Medicaid, your probate estate actually has to pay back the assets to Medicaid for whatever they have spent on you. There is a five year look back period, so if you’ve gifted something to one of your children within five years of your passing, Medicaid can go after that asset. It doesn’t make much sense for you to go through probate in that case because Medicaid is just going to take it all. Those are tough situations because, had we done a little planning before someone passed, you could actually shelter over a half a million dollars for your family through some basic estate planning tactics.
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