Can You Avoid Probate, and Is That the Best Choice for Your Estate?
Is probate a bad thing? Can you avoid probate even if you want to? The answer is yes, you can create an estate plan that avoids probate. But before you decide to go that route, you need to understand your options to determine if that is actually the best choice.
Probate has a reputation for being complicated and expensive, and it is true that that can be the case for some people’s estates. But sometimes, probate gets a bad rap without reason. It is not always a bad thing, and whether or not it will be a negative process for your estate depends on your individual situation.
As you consider how to design your plan, start by understanding what probate entails:
When someone dies, their personal representative collects their assets – meaning all finances, property, and possessions. They then distribute these assets based on what the deceased’s will says. Since the will is a legal document, a court oversees this process to make sure it’s followed exactly. This is probate.
[Related reading: What Does Probate Mean?]
Steps to the Probate Process
Probate requires four steps:
- Qualification: The first step in the probate process is the qualification, which means making sure that the will is valid. This is when the court identifies the estate’s personal representative (also called an executor).
- Giving notice to heirs: After the personal representative is deemed qualified, they have the authority to begin collecting and distributing the deceased’s assets. He or she is required by law to notify all of the heirs of the person who died. This must be done within 30 days after qualification.
- Collection of estate and filing of an inventory: Next, the personal representative must collect the estate’s assets and submit an inventory of each item with the estimated value of each. This inventory must be filed with the Commissioner of Accounts – an attorney appointed by the Circuit Court in each county to oversee estates.
- Distribution of estate and filing of accounting: After filing the inventory, the personal representative must pay all debts of the deceased and distribute any of their remaining assets as instructed by their will.
Potential Cons of Probate
Concerns about probate aren’t completely unfounded, because while the steps seem pretty straightforward, there are several hurdles that can arise, so you’ll have to evaluate if avoiding probate is the right choice for you and your estate.
- Cost: Between paying a fee for the clerk and fees for the Commissioner of Accounts, probate can get expensive. In Virginia, this is nothing compared to probate in other states, but it can still pose a problem if you have few assets.
- Time: With a simple estate, the probate process can be finished in as quickly as 6 months. But for people who have a complex estate, it has the potential to last several years.
- Complexity: The personal representative is required to comply with detailed court rules and regulations. Some people find the process complicated, daunting, or overwhelming. If you don’t have someone in your life who would make a good personal representative, it might be better to avoid probate.
- Public Record: When an estate goes through probate, all its information goes on the public record, meaning anyone can see your will and exactly what assets you had and who you left them to. Some people do not want their will or assets to be public information.
Pros of Probate
While there can be some problems with probate, it also has a couple of pros you should consider:
- Low initial cost: One of the most popular techniques for avoiding probate is to transfer everything you own to a revocable trust so that when you die, you don’t technically own anything. However, most alternatives to the probate process are more expensive to set up than a simple will.
- Easier to maintain: As we mentioned above, there are various techniques that people use to avoid probate. But they all require more ongoing maintenance than using a simple will. For example, a revocable trust needs to be updated each time you purchase real property or change financial accounts. This can be a huge pain in comparison with a will, which rarely needs to be changed.
Should You Avoid Probate?
So which is the best route, to go through probate or not? Well, it depends on you as an individual.
Here are a few questions to ask yourself to determine which avenue might be best for you and your estate:
- Do I mind if my estate plan and assets are public records after I die?
- Will anyone need assets immediately after I die?
- Do I have someone I can appoint as a personal representative who can handle the probate process?
- Do I prefer to spend additional money now to avoid my heirs have to deal with probate?
Whether or not to avoid probate is a decision that each person needs to make for themselves. In later posts, we’ll discuss various options for avoiding probate. But, keep in mind that, in Virginia, many people find that using a simple will and going through probate is the cheapest and easiest option.
[Related reading: Estate Planning In Virginia]
Need more help to know if you should try to avoid probate or not? We would love to have a conversation with you. Schedule your free consultation by clicking here.