Handbook
STEP 2: AVOID PROBATE
Your second step is to avoid unnecessary delay and court costs, as well as
administrative, professional and legal fees. This is often referred to as avoiding
probate. (As a rule of thumb, you should consider avoiding probate if you have
more than $20,000 in property.) Probate is the process of proving that a Will is
valid and includes the processes of administering, gathering and distributing of
the property that are distributed through your Will.
Let’s take a closer look at why there is so much expense and delay in the probate
process. To start, the individual you named to administer your Will will most likely
also hire an Attorney and an Accountant, and possibly other professionals. These
individuals will locate and bring your Will before the Court. They will handle your
court filings, court proceedings and appear before the Court as required. They
will locate, safeguard and manage your assets. They will locate and notify your
beneficiaries, creditors and other required individuals. They will appraise and
value your property. They will pay your required expenses and debts. They will
distribute your remaining property. They will handle any accounting or estate tax
matters and filings. They will make or advise on business, legal, accounting, tax
and other decisions.
These individuals are all entitled to be paid for their time and effort on your
behalf. This money will be coming out of your estate. In addition, in terms of time
and delay, depending on the estate, probate can take up to a year or more. And,
the longer the process takes, the longer it will take before your property finally
gets distributed to your beneficiaries.
It stands to reason then, the more you can avoid the probate process, the less
expense and delay there will be. Therefore, by reducing the amount of property
distributed through your Will, you will reduce the probate process and the
accompanying expense and delay. That is why you should “avoid probate”.
To avoid probate by having fewer property distributed through your Will, you
simply arrange ahead of time for other legal methods to distribute the bulk of your
property, especially the large items such as your house and stock portfolio. Less
valuable and miscellaneous items can still be distributed through your Will.
There are different probate avoidance methods and we will discuss the main ones
here. If you have property, and many people have more property than they
believe they do, you will want to determine which methods, or combination of
methods, best suit your particular circumstances.
Completing Step 2 means that you have taken a significant step towards
preserving your assets for the benefit of your family.
Note: A simplified and less burdensome Small Estate proceeding may be available
if you own a very limited amount of personal property and you satisfy all other
applicable conditions. In fact, the probate avoidance methods that we discuss
help to make your probate estate smaller and easier to manage, whether or not it
qualifies as a “Small Estate”.
