Experienced estate planning attorney Doug Lauenstein discusses three common misconceptions when dealing with wills and probate.
Wills, trusts and probate are not topics that easily come up in conversation. In fact, it’s common for many people to avoid discussing these matters altogether. However, it is in your best interests to know the basics. Your goal should be to understand the key fundamentals of each subject as to recognize myths. Outlined below are three universal misconceptions that many people tend to believe.
- It takes years to probate an estate. Most estates do not take years and years to resolve. Usually the biggest delay is the period which gives creditors time to file a claim. This time period is governed by state law. After the waiting period is over, the estate can be closed as soon as the personal representative has gathered all the debts and taxes. Generally, it takes a few months to get everything in order. But most estates are finished within a year. What makes some probate cases drag on for years? Three main reasons include:
- A significant estate: If the estate is so large that it owes federal or state estate tax, things tend to get more complicated. There’s no way the estate will be settled before the estate tax return is due, which is usually nine months after death. Many estates receive a six-month extension for filing as the return can be very complex.
- Family quarrels: If a family member contests the will or if siblings cannot agree on how to divide a parent’s assets, a court may have to intervene and settle matters. This equals tension, delay and expense.
- Ongoing income: Some estates (usually those of public figures/celebrities) may continue to receive income years after death, which causes the probate process to become more complex.
- Cost of probate will eat up all of the assets anyway. Many estates do not require probate proceedings. Generally, only assets owned in the deceased person’s name must go through probate. In most states, it costs several hundred dollars to file a probate case, a few hundred more to publish required legal notices and of course any attorney fees owed. However, probate cost could rise when there’s:
- Litigation over the estate: If someone contests the will or accuses the executor of misconduct, costs can soar. The estate will have to hire an attorney to defend it and if the dispute is taken all the way to trial, it may cost thousands of dollars.
- The state will take everything if someone dies without a will. Generally, your spouse and children are first in line to inherit. Keep in mind that inheritance rules vary from state to state. In some states, a surviving spouse and minor children share the deceased parent’s assets. Assets only go to the state in the event that not a single surviving relative can be located. Your personal representative can help locate any long-lost relatives. With that aside, it’s still important to:
- Write your will: You’ll want to decide who gets your assets, so do not leave that verdict to state law. Making a will is simple and can be inexpensive. Hiring an attorney can make this a smooth process.
Knowing common myths regarding wills, trusts or probate can help you avoid costly errors that may negatively impact you and yours. For more information regarding probate and all aspects regarding your estate plan, contact experienced estate planning attorney Doug Lauenstein today.