"Probate" is one of the dirtiest words in all of estate planning. Many clients focus on setting up their estate and their will with the express purpose of avoiding probate. And certainly, probate court can be a headache — an expensive headache — for a client's heirs.
But for some clients, going through probate isn't really so bad. Probate, after all, is the normal course for processing a person's will. It's simply designed to manage, settle and distribute the client's property according to the terms of the will.
Some people may spend so much time and energy avoiding probate that it ends up costing them money in the end. In certain instances, probate will be both difficult to avoid and not much of an issue for the heirs involved. Here are some things to tell probate-fearing clients to help calm them down:
1. It doesn't have to take forever. For many estates, probate is a normal, uneventful process. While it can indeed take years in some instances, for most routine estate settlements, it's not nearly that bad. In Florida, for instance, the average probate process is about six months. One study showed that in Texas, the beneficiaries of a will tend to get their payout four to eight months after the onset of the probate process. Some other states move even faster than that. For the proper, legal disposition of a person's entire possessions, that's not so bad.
2. Smaller estates can have it even easier than that. In California, for example, $100,000 in assets can be passed through a will without having to go to probate court. Many states also have an expedited probate process for smaller or less complicated estates.
3. A living trust can only do so much. Many clients try to avoid probate by loading all their assets into a living trust, but they shouldn't depend on everything being covered. Inevitably, the client will accumulate something too late in life to add it to the trust, or something will get overlooked. An open-ended will should make sure to cover everything else – and that everything else is likely to have to go through probate.
4. Divesting a client of all property can be pretty dicey. Some people try to avoid probate by putting all their assets into a co-ownership, generally with their spouse but also, occasionally, with their children. The right of survivorship means that those assets would pass directly to the co-owner of the client. But it also means the client has to surrender full control over all his or her assets. And if the spouse dies first, it creates a lot of headaches.
