Independence Day is coming up soon, and you’re probably already thinking of ways in which you can celebrate one of America’s most fun holidays. In between all the red, white, and blue, remember that the idea of independence can stretch across all kinds of areas, including those that you hold most dear. Have you thought about your future lately? And not just what you’re going to do tomorrow, or even weeks from now, but the future that will go on after you pass away.
Estate planning helps you prepare for such a future. It ensures that you’re able to spare your family the tedium and expensiveness of probate court via tools such as living trusts, gifts, and documents that will help keep your estate out of the legal system. In this article, we’ll talk about why your estate needs its “independence” from probate court.
What is probate court?
After you die, the world is left with your estate, which includes, among many things, your assets and debts. Your asset need to be distributed, as do your debts. Probate court is a special area of the legal system in which a judge uses your assets to pay off your debts, and then assigns whatever is left to your relatives. It’s basically the management and distribution of your estate using the legal process. Someone in your family is assigned the position of executor, and it is his or her job to oversee the winding down of the estate.
The Costs of Probate Court
Probate court can take at least a year, and there’s absolutely no guarantee that you’ll be able to have your assets distributed the way you want. There’s also no guarantee that your debts will be paid off in a manner you find appropriate for your family’s financial situation. The judge’s first goal is to get the creditors and IRS paid. Your loved ones come second to debtors and tax collectors.
While your estate is tied up (the more complicated the estate, the longer it’ll take), your family won’t have access to your assets. If they need money to pay bills, they are out of luck for the duration of the court process. Probate court requires a judge’s approval for basically every little thing. If your family goes through probate, a judge will run interference throughout the whole process, which will make the whole estate windup very protracted.
There’s also the expense of a legal proceeding. Filing fees can be several hundred dollars. While these fees come out of the assets of your estate, that’s still giving money to the courts that could have gone to something your family really needed.
Lastly, probate is not a private process. Probate court records are a public matter, and information about your liabilities, assets, representatives, and beneficiaries are all out there for the public to see. If someone wants to know something about you, they can read the probate file easily to find out, whether they do it by asking a county clerk (who is unlikely to care why the person wants to read your file) or by going online. Avoiding probate means that your family gets privacy.
Estate planning tools are there to help your family avoid the tedium, expense, and lack of privacy that comes with probate court. There are legal mechanisms that can give your family immediate access to your assets without requiring them to pass through court. Consult a planner today to make sure you’re getting your own “Independence Day” from costly and time-consuming legal processes.