In Aesop’s classic fable of the race between the tortoise and the hare, probate would be the tortoise. While in the tale, “slow but steady” wins the race, in probate, it’s just slow.
The amount of time it takes to go through the probate process is different depending on what state you’re in, how complicated the assets are, and if there are any disputes among the heirs, but even a basic probate is not going to happen quickly. Twelve months or longer is common, and during that time, your family may have a hard time accessing the assets needed to pay final expenses.
There is a faster way to administer your estate, but it requires some planning. A living trust is one of the best ways to avoid probate, not to mention manage your affairs in the event of a disability. Imagine the rabbit tears his Achilles tendon during the first lap. A living trust would have provisions for a disability trustee to manage his assets while he’s disabled.
The original version of the fable didn’t have a cash prize for the winner of the race, but if it had, the tortoise would have needed it for court costs. Probate comes with fixed costs, like filing fees and publication. These costs are an unavoidable expense if your estate has to be probated. After the addition of attorney fees, accountant fees, personal representative fees, appraisals, and other costs, probate can run thousands of dollars, no matter how small or straightforward the estate might seem. The costs only increase if the family ends up in a disagreement or a creditor files a claim.
If you have property in more than one state, the process must be repeated in each. Cash that could be going to your family will end up paying for legal fees and court costs. There are still legal fees associated with a living trust after death, but on average they will be less expensive than going through probate.
In an age of ever-diminishing privacy, wouldn’t it be nice to keep some things out of public record? How does privacy play into my race analogy? I’m guessing the rabbit would have preferred the outcome of that race stay private. (It’s a stretch, but it works). Most court proceedings, including probate, are a matter of public record. If your estate goes through probate, anyone who wants to see information about your assets and your family will be able to do so.
How much your assets are worth, who is claiming you owe them money, the names of your family members, and more, will be easily searchable online. Living trusts are private documents and protect your information from being viewed by anyone with internet access.
Unlike the tortoise and the hare, this is a race you don’t have to run. Probate can be avoided, and you can transfer your assets in a far more efficient, private and less costly manner by using a living trust. Now there’s a moral to the story you can run with.
Contributing Author: Amy L. Marble
Amy was raised in North Dakota. After graduating from Saint Louis University School of Law in 1996, she moved with her husband to his home state of Minnesota. Initially practicing in the field of Personal Injury law, Amy branched out to start her own practice in Estate Planning in 2003. In 2009, she stepped away from the practice of law to spend more time raising their family.