You may have heard of strategies to avoid probate, but you might not understand why it matters. Probate is a legal process in which the court determines if a will is valid and oversees its enforcement. Even if you nominate an executor, Texas law requires that all wills go through probate. As long as no one contests your will, the judge usually appoints the person whom you nominated as executor of the estate.
Slow court processes
Probate can take years to complete, and beneficiaries don’t get their assets until the process is over. Executors need to pay back creditors and file tax returns before they can divide the estate among beneficiaries.
The complexity of the estate affects how long the process takes. Estate administration is more time-consuming when there are unusual assets like race horses and collectibles. These valuables are difficult to accurately value. If a will isn’t complex and the testator doesn’t have debts, then probate can finish as fast as 30 days. Most people, however, are looking at around eight months.
Privacy
Wills are available for the public to view. You might not want others to know what you passed on and to whom. Ways around probate include transfer-on-death accounts and trusts. You could also name someone as a beneficiary on retirement accounts. Joint ownership is another estate planning strategy to avoid probate. However, you must remember that there are drawbacks to joint ownership too. If the other person accrues debts, your property is at risk to pay off those debts. You also need the other person’s permission to make changes, such as selling the property.
Reduce estate taxes
In some situations, you can reduce or prevent estate taxes by choosing a different method of passing on assets besides a will. Trusts are a popular way of reducing and avoiding estate taxes.
People try to avoid probate to save time and money and protect their privacy. Estate planning law allows other methods of passing on your assets, so a long probate isn’t always necessary.
