KCO Financial Services
Tax Advisory Unit
Comprehensive Tax, Financial And Estate Planning
That Thing Called Probate – Part 1
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By Igor Krishtul, ChFC, EA
is a big bad monster, right? Well, let’s see. Just like the
living trusts, it has received a fair amount of publicity in the last
several years or so. Some stories are outright frightening. Stories
include the surviving family members going through the agony of probate
and losing their family fortunes.
the other extreme, there are folks claiming that probate is really good
for your estate. They insist that the probate process actually protects
the widows and orphans. Or something to that extent.
year, lots of money, real estate and other property go through probate.
Their value is measured in billions. Obviously, whenever big bucks are
involved, there are always many folks interested in getting their piece
of the pie.
is a legal process. It takes place in probate courts. These courts are
also known by other names, such as surrogate. When a person dies, his
individually owned property cannot be simply transferred to others.
you want to get real technical, probate means proving that the
decedent’s last will and testament (a will) is valid. In reality,
it involves much more than that. First, the will is filed. At the end,
the judge determines the validity of the will and OKs the final
distribution of assets to heirs. There are, of course, various things
people die without wills. Even when people make wills, the paperwork
may be lost, mutilated and even intentionally destroyed. Even without a
will, the property left after death must still go through the probate
without a will is called intestate. Here, the government bureaucrats
determine how – and to whom – your assets are going to be
distributed. It’s like having a probate judge writing your own
will without your input.
minor children are involved, the judges also decide who is to be their
legal guardian. Without a valid will, your wishes cannot be conveyed to
the judges in respect to this matter. Keep in mind that many lawyers
make a comfortable living serving as guardians.
a person dies with or without a will, the courts determine who is going
to be in charge of the estate. In your will, you have the opportunity
to name an executor. A female is referred to as
“executrix”. This person must be approved by the probate
judge. But, the judges must have a pretty good reason not to approve a
person named in your will.
you die intestate, the court appoints an administrator. When people die
without wills, their voice can’t be heard in court. A family
member and close relative may request such appointment. But, the courts
are not obligated to choose among them. They can appoint outsiders.
Having a friendly judge has helped many attorneys and law firms to
build a fortune.
would be unfair to assume that all probate judges are corrupt. But,
even the most honest and ethical judges are frequently overwhelmed by
many cases they must handle. There are also probate judges who are
outright incompetent. In addition, no judge can really know all the
nuances of the testator’s wishes.
many decisions made by the probate judges are not in the best interest
of surviving heirs. Even worse, the court decisions may be contrary to
what the testator really intended. So, in most cases the probate should
be avoided whenever possible. Hey, why take chances?
property from probate is not impossible. It is voluntary on your part.
But, this removal can only be done while you are still alive. For this
purpose, the dead can only be “heard” through the legal
documents they leave behind.
the most flexible and efficient document is a living trust. It can
serve you well when you are alive. It can also be beneficial to your
loved ones after death. But, having a living trust is not the only way
to avoid probate. There are other ways permitted by law to achieve this
goal. Some types of assets, however, are more appropriate to own in
such a way that probate may not be avoided.
attorneys have a vested interest in the probate system. They feed their
kids when your kids pay their fees for handling your estate. Their fees
are usually directly affected by the size of your estate. It’s
their job to prevent you from actions aimed toward avoiding the probate
the other extreme, there are folks selling living trusts and related
products and services by any means possible. It is their job to
convince you that you must dedicate your life to avoiding probate.
the middle, you will also find incompetent attorneys, estate planners
and other “experts” who blindly accept one extreme or the
other. Don’t fall for any radical advice or hard sell. At the
end, it’s your call. No attorney, estate planner or any other
professional should dictate what must be done with your own property.
Avoiding probate may involve significant time, effort,
expenses and dedication on your part. Educate yourself, decide what you
really want and act accordingly.
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