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Probate = Nightmare

Probate = Nightmare

| August 11, 2016
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Estate Planning

The word probate should strike fear in the hearts of every executor of every estate. Probate is the court that handles the transfer of assets from a deceased person to their heirs. The biggest issue with probate is emotion, time, and fees.

Emotion

This is something that no one thinks is going to happen to their kids. They think that their kids won’t fight over our assets once they pass away. That “they all love each other and they will split everything evenly”.

While I am sure that does happen to some, in my experience over the years as a financial advisor, I have seen families that get along before parents pass away, get torn apart after the parents pass. Money unfortunately changes some people; and I don’t mean for the better.

But this is not the case for everyone. Sometimes emotions and disagreements happen because everyone has a different idea of what Mom and Dad “wants” for their assets. Then they get more emotional as time goes on and then eventually, they end up in court/probate.

If you believe in an afterlife, you might be looking down on them from above very disappointed on how things are going.

Time

If your kids are one of the few that don’t fight over an estate once you pass away, there is still some time involved with managing your estate through probate. There are court filings that need to be taken care of, changing the titles on assets, and so on.

If your kids do happen to fight over the estate, then they have to be dealt with in court. Depending on the dispute, it could take years before it is settled. I have seen several cases go over 2 years in court. Imagine the time they have to spend away from work, kids, etc., just to handle your estate.

Fees

All of this time that you spend in court will cost your heirs. Even if there is no dispute, your heirs still have to file paperwork to become the executor of the estate. That is a fee. Then they have to re-title some of the assets, which could cause fees.

It’s even worse if the estate is disputed. Imagine the cost of going to court over a 2-year period!

All of these fees can and do add up.

Solution

So what is the solution: An estate plan. Licensed estate attorneys normally handle estate plans.   They spend time understanding the situation, explain your options and then execute the plan.

As a financial advisor, I can explain what the different options (wills, trusts, etc.) are and how they function, then I will recommend you speak to an attorney.

If you have not taken the time to look at what happens to your assets once you pass away, I would suggest speaking to a financial advisor or an estate attorney. If you already have an up to date estate plan, then I’m glad you are on track.

If you don’t have an estate plan or it has been over 5 years since it has been updated, then I would again suggest to speak with an estate attorney or financial advisor.

This solution will help avoid the nightmare that is Probate.

 

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