Probate is our society’s way of moving property from a deceased person to living people. The word “probate” means “prove.” The probate process is a legal procedure we go through to prove who has the right to sign for someone who has passed away and who will inherit any assets that remain after creditors have been paid off.
Probate is generally something you want to avoid for several reasons. The biggest one for any estate is the cost. Attorneys fees can eat up a sizeable portion of the estate. This is especially true if the estate has property in multiple states, because probate proceedings will be required in each state.
Additionally, probate can be a very slow process. If your main asset is a small business and if it is tied up for months or years in probate before finally determining who has the right to run the business, there may not be much left of the business to inherit because its customers may have all left.
Another issue is privacy. Because probate is handled in court and all court matters enter the public record, the details of your estate may become public knowledge. There are now barriers in place to keep just anyone from finding out everything, but there are still some who manage to find out facts about the estate and heirs that you may want to keep private.
Still, there are some advantages to going through probate. Probate is a way to smoke out creditors, clear title to real property, let the court handle messy family disputes about inheritance, and lessen future liability for high-risk work done in the past. Architects, engineers, contractors, and doctors all have professions where someone down the line could decide the work done earlier wasn’t up to par and somebody should pay. If the estate has gone through probate and has closed, no future lawsuits can be brought against the deceased’s estate.
The thing is, if you have an estate that might benefit in this way by going through probate, you don’t have to take all the assets through that mess. Put most of the assets in a living revocable trust, and keep out just a few that might benefit from being probated. When probate has concluded, the estate is finished. No creditor can come back and claim they weren’t paid; no estranged family can come back and insist they get a bigger chunk of the pie. It is all done.