Most people understand what probate is and have a vague understanding that it is best to avoid probate when possible. While this is a good start, a better understanding of why probate avoidance is so important may prompt you to schedule a review of your existing estate plan or may push you to finally create an estate plan if you do not yet have one, with a focus on avoiding probate.
Probate is the legal process by which your estate assets are inventoried and eventually distributed when you die. The two main reasons why you want to avoid probate are time and money. As we all know, both are valuable. The probate process costs both time and money, meaning that anything you can do to decrease your estate’s exposure to probate is beneficial. Probate is an open (not confidential) legal process in each county counthouse … most families would prefer these matters remain private.
Even the simplest probate can take months to complete. The more complicated your estate assets are, the longer the probate process will last. During the time that your estate is tied up in probate, your estate assets are also tied up in the process. From a practical standpoint, this often means that those assets are inaccessible to your intended beneficiaries. Clearly, assets that are inaccessible cannot help your loved ones pay the bills.
Speaking of bills, the probate process will incur a big one. Probate is a legal process, meaning that an executor or personal representative must oversee the process. He or she will likely retain the services of an estate planning attorney to assist in the process. An accountant, appraisers, and other experts may also be needed as well. All of those people must be paid for their time. By the time all is said and done, your estate will likely lose a significant amount of money to the probate process.
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