A question often asked by Estate Planning clients is whether they should avoid probate.
Probate is the process of administering the estate through the courthouse. If someone passes away, and the individual has a Will, and has named their adult child as the Executor, it would mean the child would need to be sworn in, and the Will presented for probate at the courthouse. The Executor will be admitted to start serving as the legal representative of the estate. The Probate process is overseen by a judge taking a year or more to complete.
Does a Will go through Probate?
A Will is the deceased person’s instructions governing how they would like their estate administered, and a Will must go through probate. Wills address complicated scenarios regarding disabilities, divorce or addiction, or if one of your beneficiaries pass before you do. Wills take into account not just who gets your stuff but under which circumstances. Ultimately the judge is looking at the Will, as well as the probate code, and they are also making decisions based on their own personal experience. Sometimes the result is not what the deceased person intended, but the judge makes the final decision.
What you Need to Watch Out For
Recently Tim worked on a case where the grandmother left money in her Will for her grandchildren. When Tim went before the judge to propose the distribution, because the heirs were still minors, the judge did not allow him to do what he proposed. Tim wanted to put the money in the Uniform Transfers to Minors Act Account, which would leave the parents in charge of the money until the kids turned 21. The judge shared with Tim that in his experience, by the time the kid reaches 21 years of age, the money is gone and likely spent by the parents. The judge asked Tim to put the money into a Sequestered Account, which means the parents are not in charge, but the judge is in control. To get money from the account, Tim would have to get the judge’s permission, which could become a logistical problem at a later stage, since the judge may retire before the kids are 21.
If you decide you want to avoid probate, you might decide to put beneficiary designations on your financial accounts. This is what many financial advisors may advise you to do. Upon death, beneficiary designated assets become the property of the beneficiary regardless of what the Will stipulates. However, beneficiary designations only answer the question of who gets your stuff when you pass away. You don’t get to plan for the real world which involves disability, premature death, divorce and the need for nursing home care.
Reasons to Avoid Probate
There are certain circumstances where you definitely want to avoid probate. One of the reasons is when you have out of state real estate, as well as real estate in Pennsylvania. This is because you would need to do probate in two states. This is even more reason for you to have a Trust. Also, if your kid who is going to be Executor lives out of state, it is advisable to avoid probate. It could otherwise become an inconvenience for them having to travel often.
Come to our Workshops to Learn More
To learn more about avoiding probate, wills and trusts, please come to one of our workshops. You will get the basic information you need, and make educated decisions. We offer free consultations after the workshop, to establish how we can help you. Visit sechlerlawfirm.com/workshops to register for one of our upcoming workshops.
To listen to the related Life & Legacy Podcast, click HERE. The YouTube Video is also available to watch.