Estate Planning Myth #3: A Will Avoids Probate | Mission Viejo - Many people believe that once they have created a will (or a last will and testament if the drafter was particularly old fashioned)—whether drafted by an experienced attorney, or using a DIY solution or online form— they have avoided probate and adequately protected their families. Unfortunately, in most instances they are wrong!
What is probate?
Well to answer that question simply, probate is a lawsuit you file against yourself when you die for the benefit of your creditors. If that makes absolutely no sense than you probably understood it correctly, but for a more detailed explanation of what probate is, why it should be avoided, or need a little refresher than you can visit a previous article that we wrote here.
Now back to the question at hand.
Does a will avoid probate . . .? Simply put, no.
There is a saying that we often reference in our office when we encounter this myth and it goes . . .
"Where there is a will there is a probate."
A will is a useful tool, and great way to make some key decisions on how your affairs will be handled after you pass away. For example, a will allows you to designate a person to wind up your affairs, determine who will get your hard earned savings and property, and, if necessary, appoint a guardian to care for your minor children. However, one thing it doesn't do is avoid probate. Actually, this document has to be submitted to the probate court to begin the process of distributing your money and property. A will will allow you to replace some of the default court proceedings of probate (which are called the laws of intestate succession), but a probate will be required nevertheless. The will may reduce the level of involvement by the probate court, but this process is not private and will become a matter of public record.
It is worth mentioning there there are a few different types of probate proceedings, which we have broadly outlined in the following bullet points. The availability of these proceedings will largely depend on the state that you live in.
Summary Proceedings: In some states, if the value of your estate (i.e., what you own at your death) is below a certain monetary threshold, then anyone who is entitled to inherit from the decedent can file a petition and have the property distributed outside of the traditional probate proceedings. The filing may require a court appearance and formal legal notice to anyone who might be interested before allowing your property to be distributed.
Affidavit Procedure: Some states allow for an affidavit to be used to collect and distribute a decedent’s money and property. In some states, this affidavit can be self-executed, while others require that the document be filed with the court. Generally, affidavits require the passing of time from the date of a decedent’s death—ranging from a few days to a few months. After that, a “successor” to the decedent (a spouse or heir) signs the affidavit and presents the affidavit to collect the decedent’s assets for distribution to his or her rightful heirs.
Supervised Probate: With this type of proceeding, the probate judge oversees every step of the administration process and has to approve of the Personal Representative’s actions. During a supervised probate, all pleadings and required documents have to be filed with the probate court and then served on interested persons or parties. This can be a very time consuming and expensive process. Each time the Personal Representative has to take an action, a legal pleading has to be filed and served on the interested party, which, in contentious situations, opens up the possibility for disagreements and attorneys’ fees.
Unsupervised Probate: In cases where there are no controversies and the parties all get along, an unsupervised probate administration may be the best option. In this situation, although the administration is not supervised by a court, there are still actions the Personal Representative needs to take, but the Personal Representative may not be required to file petitions and documents for each of those steps. However, a Personal Representative may be required to file some steps, such as the preparation of the inventory, with the court and the interested parties, but no corresponding hearing is scheduled. While this is less complicated and possibly less expensive than a supervised probate, it can still be time consuming and your financial and personal affairs would become a matter of public record.
Here in California, the type of proceeding available to you really depends on your family's situation. For example, if your spouse passes away you may be able to file a spousal petition with the court. However, this option may not always be available. There is also an affidavit procedure if the decedent (the person who passed away) owns less than $150,000 in total assets, and did not own any real property. Apart, from those select instances, a probate will be required and may be either supervised or unsupervised depending on the situation. Either way in Orange County, California and Los Angeles County, California, A probate (whether supervised or unsupervised) will take at a minimum 12 months to complete from start to finish, and this is only for extremely simple uncontested probates. In many instances, it is not uncommon for these proceedings to take 24 months or longer.
You can see how this process becomes quite complicated rather quickly and depends heavily on each individual situation. This analysis only gets exponentially more complex if you own properties in multiple states.
There is really one thing to take away from this article, and that is that a will on its own, in most instances here in California, is not enough to avoid probate. That is why my firm focuses on Trust based planning. Revocable living trusts are a way to keep your affairs private, protect your family and minor children, avoid the hassle and delays of probate, and efficiently pass on your financial legacy to your loved ones. Not to mention in the overwhelming majority of cases it is cheaper than probate, often by thousands of dollars.
Yet another estate planning myth debunked! If you have any questions or need any help addressing some of these issues presented in this article we'd be happy to speak with you! We are here to help answer any questions you may have about estate planning, the estate planning process, or probate. Together, we can craft a one-of-a-kind plan to ensure that you and your family are properly protected. Give us a call today.