When someone dies the estate of the decedent is generally required to pass through the legal process known as probate. You may have heard that many people choose to include probate avoidance techniques when they create their estate plan, making you wonder “ what are the drawbacks of probate? ” By understanding the probate process better you should have a better idea why you too may wish to include probate avoidance strategies in your estate plan.
When you die, everything you own and in which you have an ownership interest must be accounted for and ultimately passed down to the rightful beneficiary or legal heir. To ensure that this is done properly and efficiently, the probate process is used. In addition, by requiring property to pass through probate it ensures that Uncle Sam gets any taxes owed out of the estate before assets are depleted or transferred.
All assets required to pass through probate must be located and secured when you die. This means those assets are not available to the intended beneficiaries until the probate process is concluded. This is one of the most significant drawbacks of probate. Leaving your spouse a bank account with $500,000 in it doesn’t do your spouse much good it the account cannot be accessed. Even a relatively small estate can take months to get through the probate process. Larger estates commonly take well over a year to probate.
Another drawback to probate is the cost. Everyone involved in the probate of an estate is entitled to a fee for their services. This typically includes the executor of your estate, an estate planning attorney who assists the executor, professional appraisers, accountants and real estate professionals. The longer it takes to probate your estate the more assets will be lost to the costs associated with probate. The more assets involved in the probate process, the longer it takes to conclude probate as a general rule. Therefore, estate planning often focuses on including strategies that remove assets from your estate or including assets that are not required to pass through probate to reduce the time and expense devoted to the probate of an estate.
If you have specific questions or concerns about the probate process and how it will impact your estate, consult with an experienced New York estate planning attorney.