FAQ Series: What’s so bad about probate?

As an estate planning attorney, I frequently speak with people - from clients to friends to tellers at the bank - who ask me how they can avoid probate. Indeed, they often pronounce the word “probate” in tones normally reserved for speaking about food poisoning or tax increases.
Why the hostility? Probate, in theory, is fairly simple: it is the court-supervised process of transferring title and ownership of your estate (your home, bank accounts, etc.) when you die, according to the terms of either your will or your state’s intestacy codes. (Intestacy codes are essentially a default will the state has written for people who have not written their own wills.)
How does probate work?
There are many different kinds of probate administration, and which an individual estate will qualify for depends on the circumstances, the family, and the assets the estate holds. That said, probate administration (very) generally works as follows:
In order to probate property of a person who has died (the “decedent”), the person appointed as executor or personal administrator in the will, or a family member if there is no will, fills out some probate court paperwork and sends it to the court with a filing fee, and with the will, if there is one. 
The probate court appoints the executor named in the will, or a close relative, if there is no will. (Again, this is very general.) The executor or administrator (known in Massachusetts as a personal representative) then collects all of the estate's assets and files an inventory listing all the property held in the estate. Then the court will publish a notice of the opening of the estate so that the decedent’s creditors can file claims with the estate. The estate will be held open for six months at this point, so that creditors have time to file those claims.
Once all the decedent’s debts have been tallied and paid, any money or property left over will be divided as specified in the will, or as directed by the intestacy codes. The executor will file an accounting with the probate court, showing how the estate’s money has been spent. There may be other filings with the court, again depending on the estate. Then the executor will pay off debts, distribute whatever’s left, and file to close the estate. The executor will also file the decedent’s last income tax return and, if the estate had income, a tax return for the estate itself. 
For more information about probate administration, the probate courts of both Massachusetts and New Hampshire have great information on their websites. New Hampshire also has helpful checklists for many types of probate administration, and the state bar association has a great pamphlet about administering an estate.
What’s bad about probate?
Sounds simple enough, right? It can be. A very simple estate, administered as described above, will take about 8-12 months to close. However, when estates have debts, family disagreements, heirs who are under 18, real estate, or are very valuable, that process may be much longer. Probate administrations taking 2-3 years are not uncommon.
Probate can also be expensive. There are court fees, of course; there are also attorney’s fees, which can be costly. Because probate is unpredictable, I charge hourly fees, rather than the predictable flat fees I charge for planning. Probate simply takes a lot longer than estate planning, and is therefore more expensive. 
(For many estates, the amount of property subject to probate administration is minor and most of the property passes outside of probate. In those cases, probate can be relatively quick and inexpensive. In my experience, these estates generally have had good estate planning.)

Probate also involves a lot of paperwork and can involve many delays, and it is a public proceeding- anyone can go into court and request your will or other probate records. (Probate records are a very important part of genealogical research- Ancestry.com has purchased many probate databases.) Probate can also be stressful for your family when they are already grieving. But it is not a bad option for everyone, and your attorney can help you make the decision that is right for you.
That said, it’s still a good idea to avoid probate to the extent that you can. There is no reason to have your estate go through probate when simple planning can save a lot of time and money down the road.
What types of property are affected by probate?
Probate affects property that you own in your name alone, like a car, house, or bank account.
Probate does not apply to property that is jointly owned or to financial instruments that have beneficiary designations, such as life insurance policies and retirement accounts. You also keep your bank accounts out of probate by putting a transfer-on-death provision on them: if you die the person named can present a death certificate to the bank, which will transfer ownership of the account to that person.
Life insurance is the textbook example of a non-probate asset. When the insured person dies, the beneficiary presents the insurance company with a death certificate, fills out some paperwork, and receives a check. No court proceeding is involved.
When you write a will, it determines how your probate assets will be distributed after your death. Wills do not overcome beneficiary designations or joint ownership. Wills also do not help you avoid probate, like trusts do. (I’ll be talking about the difference between wills and trusts in the next post.)
How do I avoid probate?
For those who wish to avoid probate, there are many options a lawyer can help with. Revocable trusts (sometimes called Living Trusts), are a great choice for many families. Beneficiary designations, joint ownership, and transfer on death provisions on bank accounts also play a part in probate avoidance planning. The estate planning process addresses a client’s concerns and desires, and the client and his or her attorney can design a plan best suited to them. I’ll discuss these strategies in more detail in future posts. 

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