When Skillern Law Firm P.L.L.C. discusses the benefits of a will or a trust, inevitably probate comes up. We advise clients to avoid probate, since it is costly and a complicated process that can easily be avoided by a trust. Still, many clients ask us: “What is probate”? Our answer is: it depends. Basically, probate is simply a court proceeding(s) in which a court administers and concludes the legal and financial matters of the deceased. Essentially, probate court is when a court distributes, decides, and delivers the deceased person’s goods to his heirs and beneficiaries.
The Probate Court is a neutral forum where beneficiaries, heirs, and creditors are able to settle disputes or other issues related to the deceased person’s estate. Probate is simple another legal court where things get settled. It is similar to a civil lawsuit or bankruptcy court in that it is the way the United States legal system has found to deal with a legal problem. In the case of probate court, it is a way to distributing estates.
One reason most of our clients try to avoid probate is the cost. Normally, the cost of probate ranges from two to ten percent of the total estate. There are many factors that go into how much probate costs, including the size and nature of the estate, how many beneficiaries or heirs the deceased had, how many creditors, etc. When there are more assets and debts, the probate process tends to cost more since it is longer to distribute. If you really think about it, it makes sense. The more creditors there are, the more time and expense it takes to sort out which creditor or beneficiary has priority and how they should be paid. Sometimes, estates simply cannot pay all of their debts and become insolvent.
Time is also an issue when it comes to probate. The probate process can take anywhere from six months to a year to distribute the estate. Complex estates can take even longer. Did you know that New York probated Marilyn Monroe’s estate from 1962 until 2001? That is 39 years! While that is an extreme, time is still an issue for most estates. In Oklahoma, there are certain deadlines that must be met. Beneficiaries and creditors are required to be notified of their rights and they have a certain amount of time in which they can respond. Sometimes, fighting between siblings, grandchildren, or other beneficiaries can cause the estate to be open for years.
Another reason many couples and families chose to get a trust done to avoid probate is that the proceedings in probate are public. Anyone can watch and read what happens to the estate. Trust distribution is private, and only a small memorandum of trust needs to be recorded with minimal information. Most people find that the privacy of a trust instead of probate is a big selling factor.
That, essentially, is what probate is and why most people tend to avoid it. A trust is a legal instrument that can avoid probate, and a qualified estate planning attorney, including those at Skillern Law Firm, can help you get one in place. A will does not avoid probate, but it can help make the process go quicker by letting the court know what your intention with your estate is. Please contact the office today for a free consultation.