Sunday, January 6, 2013
The Downsides of Probate
Probate is a process whereby the courts oversee the liquidation of a decedent’s assets.
The process traces its roots to the times of the pioneers when people received a “patent” from the U.S. government indicating ownership of a parcel of land. When the earliest settlers passed away, a system was created to facilitate the orderly transfer of the “patent” from the decedent to his heirs. The system became known as probate.
The process has become a tedious legal procedure with three phases: the inventory of the decedent’s assets; the settlement of obligations to creditors, and the distribution of assets to the beneficiaries. Given the arduous process, one would do well to hire probate attorney if the decedent’s estate undergoes probate. In California, there is a waiting period of four months to give ample time for all creditors to file for claims. Only when all liabilities of the decedent have been settled can the estate be distributed to the heirs.
The waiting period is the least of the downsides of the probate process. Another downside is the long time it takes to probate an estate. Barring hitches, it may be over in 8 to 12 months. These are exceptional cases, however. This process generally takes from 15 to 18 months to close and with new changes coming up could be even longer. In some cases, especially with high-value estates, properties in several states and many contesting interested parties, the process may take longer. A long probate procedure will mean higher legal expenses for the decedent’s heirs. An experienced California estate planning attorney can find ways to cut through the process.
A more compelling reason to avoid probate is it being a matter of public record. Since this is a court process, the records of the case will be open to any interested party. Any interested party can go to the California Superior Court in the county where the decedent lived, and request to check the file. The decedent’s probate file will include the will and other pertinent information in the procedure. As an example, if the decedent’s estate has insufficient liquidity and the liquidation of assets is an option to settle obligations, a buyer can check the decedent’s file so he can gain leverage at the bargaining table.
In making his final plans, a person would certainly want to have confidentiality especially when it comes to who his beneficiaries are. His wish for such will not be possible in a probate.
Given its downsides, there are legal mechanisms that can be used to avoid this tedious process. If his estate is valued at less than $150,000, he may opt to have affidavit certifying such valuation. Such a document is sufficient in lieu of probate. He may also have his estate held in a living trust. To avoid probate and to enable you to bequeath the most for your loved ones, it is best that you consult an experienced estate planning attorney.
I help people protect their families through affordable, personalized estate planning. Tompkins-Law.com I am in solo practice in Orange County, California where I focus on estate planning, family trusts, living trusts, wills, corporations and business succession planning. I speak Spanish and serve the latino community. Fideicomisos-Testamentos.com