For many people, the word probate conjures up fears that their hard-earned money and property will disappear after their death into the black hole of court costs and lawyers fees, dragging their heirs through a long, torturous and painful process. As a result, many people look for ways to avoid probate.
The truth is that whether probate avoidance is appropriate depends on your situation. Some people should make plans to avoid probate, while for others probate may be a good option.
Probate is the process in which the executor or heirs submit a person’s last will and testament to the NY surrogate court for approval to implement it under the court’s supervision. The process can lead to certain disadvantages:
- Probate can be expensive. Attorney fees and court costs do add up, especially if there are numerous heirs and property located outside of New York State. In such a case, there can be difficulties notifying all the heirs and getting jurisdiction over all the necessary parties.
- Probate can be lengthy. The process of probate serves to protect the heirs by creating a system of checks and balances to ensure that the executor distributes property according to the wishes of the deceased. If there are disputes in the probate process, it can drag out significantly.
- Probate is public. Everything filed in probate court is public record, including your will and statements of your assets.
Some types of property can pass on to heirs outside of a last will and testament. Avoiding probate means carefully distributing your assets into formats that transfer to your heirs automatically when you die. Various types of trusts, joint ownerships of accounts, and beneficiary designations on life insurance policies are the most common tools to avoid probate.
Transferring property using trusts, jointly owned accounts, or beneficiary designations is not for everyone, though. Failure to put new assets into pre-existing trusts can ruin a solid estate plan and land your heirs in probate court anyway. There may be some increased tax consequences for using probate avoidance tools. A trustee can still be challenged if he or she fails to administer the trust properly. Sometimes, a simple, local estate going through probate better serves everyone involved.
We have years of experience guiding our clients through the NY estate planning process and helping them decide which methods work for them. Contact us for a free consultation to see what is best for you.