The Three Evils of Probate.
No one likes to think about dying, let alone talk about it or plan for it. But as Benjamin Franklin said, “In this world nothing is said to be certain except death and taxes.” Added to that “certainty” is the simple fact that without proper planning there are three evils that will attend a persons passing: Time, Expense and Lost Privacy
1) Time – Unfortunately, it could take a minimum of 12 months to get through probate court. Or take as long as 18 months, if not longer. What this means is that no one will have access to your assets until the judge settles the estate through probate court. At a minimum the first four months are dedicated solely to informing your creditors that a probate has been opened and they should contact the executor they’re owed money. Your creditors will be first inline and your assets will be held hostage by the court until the process is completed!
2) Expense – Probate is expensive! Once you add in lawyer fees, other professional service fees (CPAs, any appraisers, etc.), and court filing fees, going through the court Probate process could easily cost your loved ones about 5% of the value of the estate. So, if your estate is worth $1,000,000 then your loved ones can expect to pay about $50,000 in fees and costs!
3) Lost Privacy – Probate is a public process. All documents filed in court are public and available to anyone. Further, court proceedings are also public. Aside from loss of privacy, the biggest danger here is the predators who search probate filings and prey upon young people who inherit money. Without a trust in place, or adequate protections, children who have lost their parents, will inherit any money or insurance proceeds left to them at the age of 18 outright! There are very few 18 year olds out there who would make wise decisions with a lump sum. Worse yet, these young people will be targeted by predators looking to take advantage of their new wealth.
There is Good News!! All of these evils can be greatly reduced and avoided all together. It will require action on your part to share in the Good News. In fact there’s more Good News when you actively participate in estate planning than the evils listed above: Time for loved ones to grieve without worrying about court procedures and deadlines, passing on more than “stuff” to your children and children’s children like your ideas, values and hard earned understanding of what wealth really is and peace of mind that you’ve ended well by planning well.