“It’s beginning to look a lot like…probate!” This grim twist on a classic holiday song is just what will happen if you don’t take the precautions necessary to protect your family after you have passed on. If you don’t know what probate is or if you’re not sure why it’s such a legal boogeyman, this article will help clear that up.
What is Probate?
Consider this scenario. Your close relative passes away. In the midst of the grief and dealing with funeral arrangements, you learn that she didn’t have an estate plan. Now, with all the other burdens that come with losing a loved one, you have to go to court and endure a lengthy, time-consuming process to have a judge (who doesn’t know your family) divide up your relative’s assets and even saddle you with some debt, if he or she chooses. Sounds awful, right?
It is. This process is called probate. The probate court handles estates whose dispersals have not been planned after the death of the owner. The probate court divides up assets and debts, distributing the estate in the way that it sees fit. This winding up is not always done with the best interests of your family in mind—not because of bad faith on the part of the court, but because it doesn’t know your family well enough to know exactly where everything should go.
To avoid this, you should engage in a process known as estate planning.
Estate Planning 101
Estate planning is also a process, except, in this case, it is one that will help your family. When you are planning your estate, you decide many important things, such as where your property will go, who will take care of your children, who your Power of Attorney will be if you’re incapacitated, and more.
With estate planning, among many legal devices, you set up a living will and trust, and leave health care directives for hospitals and doctors in the event you’re incapacitated and unable to make decisions for yourself at that time. Through estate planning, you are able to avoid probate court by making the decisions that are best for your family.
I have a last will and testament. Is that enough?
A common misconception is that a last will and testament is enough to keep you out of probate court. In fact, when people think of estate planning, they probably just assume it’s making a will and shoving that document in the drawer until you die. However, that’s not what estate planning entails. The process is much more detailed and safeguarded.
Your last will and testament is still subject to probate. You won’t get out of probate court that easy. Many experts look at last wills as an interim measure until your living trust and living will are set up.
A last will and testament is not enough. To make sure you are 100% in the clear, with no probate court on your horizon, set up an estate planning consultation.