What is Probate?
At its essence, Probate is a court proceeding. The job of the Probate Court is to distribute a decedent's "estate". If an individual dies owning an asset (i.e real estate, bank account, etc.), the title to those assets passes to the person's "estate". The Probate Court is then called up to distribute the estate. If the decedent had a will, then it is given to the judge and serves as instructions on what to do. If the decedent had no will, then the State's Laws of Intestacy apply. Intestacy laws are therefore a will for anyone who died without one.
Why Avoid Probate?
Probate is essentially a tax on the American public. At least the taxes imposed by our government go to good things like building roads, educating our youth, and providing a military. However, the probate "tax" goes to attorneys and financial institutions that have no interest in you. This is why avoiding probate is so important.
Here are just a few of the reasons to avoid probate:
- Cost - Probating a small, undisputed estate in Illinois can take anywhere from $4000 to $6000. Most estates cost more than this to probate.
- Time - Probate is a lengthy process that often takes over a year to complete. Especially complicated estates can be stuck in probate even longer.
- Publicity - Probate is a process that can throw your private financial information into the public sphere.
- Uncertainty - Even with a will, probate can lead to your assets being distributed among beneficiaries in a way that is not in line with your final wishes.
You worked hard to provide for yourself and your family. Without proper planning, your hard-earned money will go to attorneys and courts. With a little bit of effort on your part, you can save tremendous effort and cost down the road. It's like anything in life, simple steps now can save time and effort in the future.
How to Avoid Probate
To avoid probate, you need to go through each of your assets and make sure that each one of them has clear cut instructions on what will happen to it when you die.
The ways to do that include the following:
- Name a beneficiary - Naming a beneficiary helps ensure the courts do not pick a beneficiary that is inconsistent with your intended wishes.
- Add a joint tenant - Joint tenancy allows two or more people to own a property together, meaning that the owner's interest in their property will pass to their survivors upon death.
- Put assets in a trust - The right trusts can pass your assets directly to your intended beneficiaries while bypassing the probate process entirely.
Take a few moments and make a list of everything you have and figure out what would happen to it if you died tomorrow. If you don't know the answer, please give us a call and we will tell you. If you don't like the answer, then do something about it. Update your beneficiary forms or add new beneficiaries.