Probate can last for years and spend $1,000’s if not $10,000’s. That is money that should go to your family.
The attorney can ask for about 3% of your GROSS estate. The executor can ask for another 3% of your GROSS estate. Your gross estate is the value of all property without subtracting out what is owed on it. For example, if you have a $250,000 house and owe $240,000 the lawyer gets 3% of $250,000 ($7,500) and the executor gets another 3% ($7,500) minimum. If there is litigation involved, those numbers rapidly rise.
Probate is the public, formal, red-tape filled and court-supervised cold, impersonal process of transferring ownership of your property to the next generation. It consists of many steps required by law and takes slightly different paths depending on the presence of a Last Will and Testament or not.
Most of the time, much if not all your property is not available to your loved ones until the end of the process.
Long, red tape filled, impersonal processes take a lot of time and money to finish. Everyone else gets paid first: administrator, attorneys, funeral home, appraisers, the court, taxes, and creditors. Only then will your heirs get what’s left. You case must wind its way through the slow court system at the “speed of law.”
Since the courts are involved, probate is a public process. All the documents, including inventory and accountings, are available for the public to review. Therefore, we all know about the proceedings for celebrities like Prince or Michael Jackson. People don’t find it uncommon to start receiving mailings with offers. (As an attorney, I get offers to help sell the assets from various people…)
Your and your family’s private affairs will be open to public scrutiny. It goes beyond just publishing the fact of your probate in the newspaper. It can also expose your family to crimes of opportunity. Con artists, creditors, overly aggressive sales people, and people eager to exploit financial weakness routinely look at the Probate records. There might not be a bad reason, but on the other hand they may be looking to exploit your family.
Regardless of motive, these people present a threat to your family that they don’t need. You can’t protect your family from them if your estate goes through probate.
If there is a Last Will and Testament, the first step is to present the Will to the court and have it declared valid. The next step is to get somebody appointed to oversee the rest of the process. This person is called the Personal Representative in modern language. In older, more formal language that person may be called the Executor (male) or Executrix (female).
If there is not a Last Will and Testament, then somebody still must be appointed to oversee the process. Somebody that is an “interested party” may ask the court to be in charge. When appointed that person, in the older language, would be known as the Administrator (male) or Administratrix (female). But, in modern language, as the Personal Representative.
Just about anything that needs to be done to manage your final estate will require the court’s permission if you didn’t leave a Will. Without a Last Will and Testament, if anything needs to be sold, even just for an estate sale, you must ask the court for permission.
After this, the process can get very complex, or be simple. But, eventually, everything goes where you wanted it to. That is, if there are no successful challenges.
If you don’t have a Will, who does your stuff go to? Most, if not all states have already decided that for you. For example, in Arkansas, your spouse will get 1/3rd of all your “personal” (that is not real estate) property and a “life estate” in your real property. Your children get a share per child of the remaining personal property and a share each of the real property subject to your spouse’s “life estate.”
For example, you own a house only in your name and $120,000 in your name and have two children. Your spouse gets 1/3 of the money, that is $40,000. Your children split the remaining $80,000 for $40,000 each. Your wife gets a 1/3 life estate in the property (meaning she owns that much for the remainder of her lifetime) and your children get ½ each ownership in the home as tenants in common, subject to mom’s life estate.
As for your spouse, even if you try to cut them out of the Will, most states have laws on the book that give your spouse a minimum, even if you have a Will. All your spouse must do is claim it against the Will. (Caveat: If you are going to divorce late in life, look at the cost of a divorce vs. the cost of staying married. You may just decide to live separately instead…)
All the details of Probate could, and do, fill several volumes. In Arkansas alone, the entire probate code (including trusts, probate, and guardianships) comes to over 1,000 printed pages when you include the summary of court decisions and annotations.