Disadvantages of Probate
While many people have heard of probate, often in conjunction with planning their estates, they usually are unsure as to what it is aside from it involving lawyers and a court. They’re often told by estate planning attorneys or others who have gone through probate to avoid it like the plague. More often than not, this is pretty sound advice as probate can be time-consuming and some argue it only benefits the attorney.
However, one should start with a basic understanding of what Probate is. Probate is the legal process of transferring a decedent’s estate (title) to the rightful heirs of the estate. The probate process involves (i) collecting and identifying the deceased person’s property, (ii) paying any debts and taxes, and (iii) identifying the proper heirs and distributing the estate property to them. While the court oversees this process, in most cases the work is done by the executor of the decedent’s estate with the help of an attorney.
Basically, probate is a court process used to transfer assets from a deceased individual to their heirs.
While many would consider court oversight over a Probate case to be largely beneficial, there are some disadvantages that come with court supervision:
High Cost vs Private Planning: Probate attorney fees are set by the Probate Code of California based upon the gross value of the estate and the administrator of the estate may also elect to receive the same fees as the attorney. There are also a number of court fees (filing fees, notice of death fee, etc.) and creditor claims which, when coupled with the above mentioned fees, can add up quickly and significantly diminish the value of the estate thereby reducing possible inheritances.
Extended Timeline: Court proceedings can move at a snail's pace, and probate court is no exception. While probating an estate can be done in six (6) months, delays in administration of assets or the court's heavy schedule can cause a case to carry on for two (2) years or more. During this time, the assets must be accounted for and only basic expenses such as mortgage payments and property taxes may be paid. Only by a showing of great need to the court can some assets be released prior to final distribution. Additionally, prospective heirs are required to be notified, therefore failure to locate them or a challenge by one may lead to delays in the proceedings.
Public Proceedings: Court proceedings are matters of public record and therefore the records are open to the public. This includes documents submitted to the court, such as a Will. Additionally, as mentioned above, there must be a public notice of death in a local publication allowing for heirs and creditors to come forward and submit their claim on the estate.
Lack of Control: As probate proceedings are governed by the Probate Code of California, the degree of control the decedent and the administrator can exert over the distribution and proceedings can be very limited. The Probate Code has guidelines for the judge to determine the hierarchy of heirs and distribute the assets. If a disgruntled heir chooses to challenge a Will, or if there is none, the court will have to determine the final outcome, typically after a delay caused by the challenge. Also, situations can arise where the administrator has to seek court approval prior to taking action. This can create issues where there are volatile assets involves such as investments or real property.
If you would like a free consultation to discuss probate or avoiding probate, then contact us here or call us at 909-307-6282.
If you would like to learn more about just what the probate process entails as well as some of the advantages that accompany it, please check out the resources below: