When people die, their estates go through a process called probate, which is subject to a lot of misconceptions.
Myth #1 — If you die without a will, the state gets everything.
There are plenty of reasons to write a will, but worrying about the state snatching your family’s inheritance is not one of them. If you die without a valid will — intestate — the state law kicks in. Generally, your spouse and children are first in line to inherit. Assets only go to the state if there are no relatives to be found.
Myth #2 — It takes years to probate an estate.
Most estates don’t take years to resolve. The only delay is the period mandated by state law that gives creditors time to file claims. The length of the creditors’ claim window varies from state to state, starting when notice of probate proceedings is published in the local paper, running from three to four months on the short end, to a year on the long end.
Why does probate sometimes drag on for years? Family fights land in court —acrimony, delay, expense. Sometimes it’s due to the fact that it is a very big estate that owes federal or state estate taxes, which can take nine months to settle and can go another six months if an extension is filed.
Myth #3 — The cost of probate will eat up all estate assets.
Many stories circulate about probate costs such as lawyers’ fees and court costs. Generally, only assets owned in the deceased person’s name alone need to go through probate. If the value of the probate assets is small enough, the family can take advantage of probate shortcuts, which are less expensive than regular probate.
Even if the estate requires formal probate, costs are likely to be less than 5 percent of the value of the estate. In most cases you can figure on a couple of thousand dollars for an attorney, several hundred dollars to file the probate case, and a few hundred dollars for costs such as appraisals and copies of court documents. Only in relatively rare cases, such as when someone contests the will or accuses the executor of misconduct, can costs soar.
The key to moving through probate successfully is knowing how the rules apply to your particular circumstances. Give a lawyer, like an estate planning lawyer from Bott & Associates, Ltd., a call today to plan so that the process will be smooth and less complex when future events ensue.