Many people prefer to avoid probate if possible, hoping to save their heirs money and time while protecting the privacy of their estate. However, is there a situation in which probate can be beneficial? An experienced estate planning law firm can help you determine if probate is right for your estate.
Why Do Many People Try to Avoid Probate?
Probates that go on for years and are filled with conflict, outrageous facts, and public personalities, not surprisingly, are expensive and frequently in the news. No surprise – the takeaway message is “avoid probates”. And probates in some states are simply expensive. Take California, for example, where legal fees may be based on a percentage of the value of the estate. Fortunately, in Washington, probates are straightforward, and fees are based on the extent of legal services provided. Probate of a well set up estate can be completed in a matter of months and without court intervention. Fees will depend, in part, on how well the Personal Representative does their job. Commonly, legal fees can range from a low of a few thousand dollars to over $10,000, depending on the complexity of the estate. So, if there is no benefit from a probate, an estate plan can be set up to avoid it. What’s right for your estate depends on many factors.
Ways to Avoid Probate
You can avoid probate by understanding your estate planning options, including:
- Using a Revocable Living Trust – if properly funded and maintained, an RLT will avoid probate
- Even without an RLT, an estate plan can avoid probate through
- transfer on death / pay on death provisions of accounts
- beneficiary designations for life insurance and retirement accounts
- transfer on deeds for real property
- Titling accounts as joint tenants with right of survivorship avoids probate of that asset but carries with it risk of loss should your co-owner’s creditors seek access to your money
- Community Property Agreements with a dispositive provision avoid probate for married persons
If you die without creating a will or an estate plan, your assets must go through probate. The same is true if you don’t transfer your assets to a living trust or take other steps to keep your estate out of probate.
An experienced estate planning attorney can help avoid probate of your estate. However, and this surprises many people, there are some circumstances where probate provides important benefits.
How to Benefit from Probate
Probate can help your family by:
- Reducing the time creditors have to make claims against the estate through the Creditor’s Claim Procedure
- Resolving debts with creditors in a relatively simple and inexpensive way
- Resolving disputes between your heirs. The court can act as a neutral third party if you don’t wish to mediate the dispute
- Ensuring that your assets are distributed properly
- Ensuring that the surviving spouse will not become impoverished from long-term care costs through establishment of a testamentary trust
- Ensuring that any beneficiary of your estate who receives government benefits may continue to receive such benefits, despite their inheritance through establishment of a testamentary trust
Trusts are often established through a Will and the probate process. A properly drafted testamentary trust (testamentary means a trust created by a Will through probate) allows a beneficiary to receive their inheritance, in trust, and become or remain eligible for government needs-based benefits. Through a Will with an Asset Protection Supplemental Needs Trust, a couple can protect 50% to 100% of their estate upon the death of the first spouse, ensuring that the surviving spouse will never become impoverished. By way of example, if the couple has a $1 million estate, $500,000 (50%), and possibly up to $1 million (100%), can be placed in the trust for the surviving spouse. Probate and its related expenses are well worth the result of $500,000 to $1 million in asset protection!
Contact a Spokane, Washington, Estate Lawyer Today
ELG Estate Planning is an estate law firm serving Spokane, Washington. Managing partner Lynn St. Louis believes everyone deserves compassionate, experienced, and capable estate planning services. Contact ELG Estate Planning today to learn more about what we can do for you.