When creating a last will and testament (commonly known as a will), one of your most important considerations is who to choose to serve as the executor (also called a personal representative) of your estate.

As the name implies, the role of the executor is to execute the instructions that you provide in your will. You may give your chosen executor some discretionary powers in determining how your assets (money and property) are to be distributed, but they have limited latitude to make independent decisions. Any deviation from their specified powers could cause a conflict in your estate that leads to legal consequences.

To avoid any unnecessary complications in the settling of your affairs, take care to avoid ambiguous or unclear language in your will. If there are any doubts about your last wishes, the executor and beneficiaries may wish to consult with an estate planning lawyer to discuss next steps.

What Happens With Your Will When You Die

Upon the death of the testator—the person who made the will—probate will be opened if the testator died owning accounts or property in their sole name and without a properly completed beneficiary designation form.

Probate is the court-supervised process in which the testator’s will is validated and administered. The person named as executor in the will initiates and carries out the probate process. The probate process can vary slightly from state to state, but generally unfolds in the following manner:

1. The death certificate is filed with the court.
2. The testator’s will is submitted to the court and confirmed as valid.
3. A petition to initiate probate is filed.
4. The court gives the executor permission to gather, evaluate, and manage the testator’s assets.
5. The executor contacts beneficiaries to inform them that probate has commenced.
6. Lists of the deceased’s assets, debts, bills, and taxes are compiled and submitted to the court.
7. The testator’s outstanding debts and taxes are paid from the testator’s assets.
8. The remaining assets are distributed to the beneficiaries.
9. The estate is closed and probate ends.

These steps imply that the decedent has, in fact, left a will. Dying without a will—known as dying intestate—entails much greater court involvement. The court appoints an executor, identifies heirs, and determines who gets what. Dying intestate can even empower the state to choose the guardian of your minor children.

It may not be possible to avoid probate completely (e.g., if a guardian appointment is required for a minor child, if an executor must represent the decedent in a pending or new lawsuit, or if the decedent died with assets solely in their name and without a designated beneficiary). Probate duration and costs, however, can be reduced through careful estate planning.

Responsibilities of the Executor

The executor named in a will is responsible for carrying out the testator’s final wishes. The executor is a liaison between the probate estate and the probate court, as well as between the probate estate and the beneficiaries. Their duties include locating and valuing assets of the estate, paying debts, and distributing assets to beneficiaries in accordance with instructions in the will.

Executors owe a fiduciary duty to the estate and its beneficiaries that compels them to act in the best interests of both. Because an executor may also be a beneficiary of the estate, their actions may be scrutinized to ensure they are acting fairly and legally.

When an Executor Can Use Discretion

The executor must, to the best of their ability, carry out the directions expressly stated in the testator’s will. They cannot make changes to the will, but there are cases where the executor can use discretion when settling an estate. The testator might explicitly give discretion to the executor, or the need to exercise discretion may arise due to ambiguity in the will, as in the following examples:

• The will gives the executor wide latitude to decide when to sell the testator’s property.
• The will allows the executor to decide whether to convert assets to cash prior to distribution.
• The will states that “reasonable and necessary” repairs must be made to the testator’s home prior to its sale or distribution (words such as “reasonable” or “necessary” may be too vague and leave the executor confused about how to proceed).

If the will is unclear, the executor should seek clarification from the court to assist with interpretation. Anyone with a stake in the estate may also raise a legal challenge against the executor, asking the court to remove the executor or commencing probate litigation against them.

When a gray area exists within the provisions of the will and the executor acts in good faith and within the scope of their power and duties, the court may uphold their actions. A petition to remove an executor or a lawsuit against the executor for breach of fiduciary duty will only succeed if there is evidence of misconduct, such as the executor explicitly going against the will or estate’s interests, acting in their own best interest, or withholding an intended gift from a beneficiary.

Beneficiary Agreements to Change a Distribution

While the executor and beneficiaries cannot rewrite a testator’s will after the testator has died, the beneficiaries may be able to mutually agree to modify what they receive from the estate.

Making changes to distributions can be done using a document known as a nonjudicial settlement agreement. A nonjudicial settlement agreement is a contract that may be used whenever the beneficiaries agree that asset distribution should be different than what the will stipulates, including in these situations:

• As a strategy to minimize a beneficiary’s inheritance tax
• When the family wants to balance out unequal distributions among all beneficiaries
• To settle disputes about the distribution of assets

A nonjudicial settlement agreement can be a way to resolve a loved one’s legal challenge to the will. The court should respect this agreement if it meets applicable legal requirements. However, before signing an agreement to change the provisions of the will, the beneficiaries should consult with a probate attorney so they understand whether this type of agreement is legally recognized in their jurisdiction, along with what the implications and potential consequences would be.

Legal Guidance for Executors and Other Family Members

In addition to assisting with a nonjudicial settlement agreement, there are many issues related to probate that might require attorney assistance.

Executors, beneficiaries, and anyone who feels they have been treated unfairly in a will may need to consult with a probate attorney about interpreting and administering the will, determining their rights and duties under state probate law, and potentially challenging the will in court. In addition, when creating your will, it is crucial that you set out your intentions in a way that minimizes the potential for conflict among everyone involved.

Get legal help with a will or probate issue: contact our law office and schedule a consultation.

Ideally, when someone passes away, the paperwork and material concerns associated with the deceased’s passing are so seamlessly handled (thanks to excellent preparation) that they fade into the background, allowing the family and other loved ones to grieve and remember the deceased in peace.

In fact, the whole business of estate planning—or at least a significant piece of it—is concerned with ease. How can money, property, and legacies be transferred to the next generation in a harmonious, stress-free, fair process? To that end, many people strive to avoid burdening their loved ones with the complications and costs involved with probate.

There are numerous tools of the trade that a qualified attorney can use to keep your money and property out of probate, for example, establishing joint ownership on bank accounts and real estate titles, designating beneficiaries for life insurance policies and certain accounts, and so on. However, setting up a revocable living trust is quite often the best, most comprehensive option for avoiding probate. Let’s discuss why this is true.

What is a trust?

Often touted as an alternative to a will, a trust is a legal structure that owns your accounts and property or is named as the beneficiary of certain accounts and property (like a retirement account) and is managed by a trusted decision maker, also known as a trustee, on your and your beneficiaries’ behalf. A living trust is established while you are still alive, as opposed to being created upon your death. You can be the trustee for your own living trust until you are no longer able to manage your financial affairs or you pass away, at which point your chosen backup trustee, also known as a successor trustee, steps up and assumes the responsibility for managing the trust on your or your beneficiaries’ behalf.

How does a trust help you avoid probate?

The purpose of probate is to transfer property ownership for all accounts and property that are owned in your sole name and that do not have a beneficiary, pay-on-death, or transfer-on-death designation when you pass away. A trust can bypass this process completely because your accounts and property are either transferred to the trust while you are alive, or the trust is named as the beneficiary at your death. Therefore, when you die, there is nothing that needs to be transferred by the probate court (everything is already in your trust or was transferred to the trust automatically at your death). Furthermore, a trust can cover virtually any type of account or property, from real estate to heirlooms to stock to bank accounts. When a trust is structured correctly with the help of an experienced estate planning attorney, your affairs can stay out of probate court entirely. This process not only limits court costs but also maintains the privacy of your financial records while enabling your beneficiaries to enjoy the benefits of the trust without disruption or delay.

Establishing a trust can seem a bit complicated, and the process can cost a bit more initially than preparing a will. However, if you are willing to invest a little more up front, a trust can be your best option for avoiding probate later.  The key to effective planning that minimizes the likelihood of a drawn-out, contentious, expensive process is to work with highly qualified, trusted people. Find a lawyer who genuinely cares about you and your loved ones and who knows how to forge the right strategy for all of you. Give us a call today to learn more about the next steps for achieving the peace of mind you deserve.

When you pass away, your family may need to sign certain documents as part of a probate process in order to claim their inheritance. This can happen if you own property (like a house, car, bank account, investment account, or other assets) in your name only and you have not completed a beneficiary, pay-on-death, or transfer-on-death designation. Although having a will is a good basic form of planning, a will does not avoid probate. Instead, a will simply lets you inform the probate court of your wishes—your loved ones still have to go through the probate process to make those wishes legal. 

Now that you have an idea of why probate might be necessary, here are three key reasons why you may want to avoid probate, if at all possible.

1. It is all public record. 

Almost everything that goes through the courts, including probate, becomes a matter of public record. This means that in order to properly wind up your affairs (i.e., pay your bills, file any remaining tax returns, and distribute your money and property to your chosen recipients), documents—including associated family and financial information—could become accessible through the probate court to anyone who wants to see them. This does not necessarily mean that account numbers and Social Security numbers will be made public, as the courts have at least taken some steps to reduce the risk of identity theft. But what it does mean is that the value of your accounts and property, creditor claims, the identities of your beneficiaries, contact information for your loved ones, and even any family disagreements that affect the distribution of your money and property may be publicly available. Most people prefer to keep this type of information private, and the best way to ensure discretion is to keep your affairs out of probate.

2. It can be expensive. 

Thanks to court costs, attorney’s fees, executor fees, and other related expenses, the price tag for probate can easily reach into the thousands of dollars, even for small or simple matters. These costs can easily skyrocket into the tens of thousands or more if family disputes or creditor claims arise during the process. Your money and property should be going to your loved ones, but if it goes through probate, a significant portion could go to the courts and legal fees instead.

Of course, setting up an estate plan that avoids probate does have its own costs. Benjamin Franklin wrote, “An ounce of prevention is worth a pound of cure.” Like the “ounce of prevention,” costs you incur now to put a plan in place are more easily controlled than uncertain costs in the future, especially when you consider that your loved ones may be making decisions while grieving. With proper planning, you can minimize the risk of costly conflict and also reduce or eliminate some costs; if there is no probate case, there will not be any probate filing fees or court costs.

3. It can take a long time. 

While the time frame for probating an estate can vary widely by state and by the value, amount, and complexity of the deceased person’s accounts and property, probate is not generally a quick process. It is not unusual for probates, even seemingly simple ones, to take six months to a year or more, during which time your beneficiaries may not have easy access to the money and property you intended to leave them. This delay can be especially difficult for loved ones experiencing hardship who might benefit from a faster, simpler process, such as the living trust administration process. Bypassing probate can significantly expedite the disbursement of money and property so that beneficiaries can benefit from their inheritance sooner. If you have property located in multiple states, a version of the probate process must be repeated in each state in which you hold property. This repetition can cost your loved ones even more time and money. The good news is that with proper trust-centered estate planning, you can avoid probate in all of the states, simplify the transfer of your financial legacy, and provide lifelong tax savings and asset protection to your family. To learn more, call us to schedule an appointment. One of our experienced attorneys will be happy to strategize with you.

In estate planning circles, the word “probate” often carries a negative connotation. Indeed, for many people—especially those with valuable accounts and property—financial planners recommend trying to keep accounts and property out of probate whenever possible. That being said, the probate system was ultimately established to protect the deceased’s accounts and property as well as their family, and in some cases, it may even work to an advantage. Let us look briefly at the pros and cons of going through probate.

The Pros

For some situations, especially those in which the deceased person left no will, the system works to make sure all accounts and property are distributed according to state law. Here are some potential advantages of having the probate court involved in wrapping up a deceased person’s affairs:

• It provides a trustworthy procedure for redistributing the deceased person’s property if the deceased person did not have a will.
• It validates and enforces the intentions of the deceased person if a will exists.
• It ensures that taxes and valid debts are paid so there is finality to the deceased person’s affairs rather than an uncertain, lingering feeling for the beneficiaries. 
• If the deceased person had debt or outstanding bills, probate provides a method for limiting the time in which creditors may file claims, which may result in discharge, reduction, or other beneficial settlement of debts.
• Probate can be advantageous for distributing smaller estates in which estate planning was unaffordable.
• It allows for third-party oversight by a respected authority figure (judge or clerk), potentially limiting conflicts among loved ones and helping to ensure that everyone is on their best behavior. 

The Cons

While probate is intended to work fairly to facilitate the transfer of accounts and property after someone dies, consider bypassing the process for these reasons:

• Probate is generally a matter of public record, which means that some documents, including personal family and financial information, become public knowledge.
• There may be considerable costs, including court fees, attorney’s fees, and executor fees, all of which get deducted from the value of what you were intending to leave behind to your loved ones.
• Probate can be time-consuming, holding up distribution of your beneficiaries’ inheritance for months and sometimes years. 
• Probate can be complicated and stressful for your executor and your beneficiaries. 

Bottom line: While probate is a default mechanism that ultimately works to enforce fair distribution of even small amounts of money and property, it can create undue cost and delays. For that reason, many people prefer to use strategies to keep their property out of probate when they die.

An experienced estate planning attorney can develop a strategy to help you avoid probate and make life easier for the next generation. For more information about your options, contact us today to schedule a consultation.