When you hear about an alternative estate planning option such as a living trust, one of the key selling points mentioned is often that you can “avoid probate.” However, if you don’t know much about estate law, you may be wondering why you’d want to avoid probate. The New Jersey probate process is less burdensome than probate in many other states, and generally moves forward more quickly. Still, there are many reasons that it may be to your advantage—and that of your heirs and beneficiaries—to avoid the probate process.
Top Reasons for Avoiding Probating
- Probate is public. Like most matters in the civil and criminal justice systems, a probate case is a matter of public record. That’s why there’s often a flood of very personal information in the news shortly after a celebrity or other high-profile person dies. While most of us don’t have paparazzi lying in wait for public records, information in court records can and does get out. One of the most significant risks associated with the public nature of probate arises when one or more heirs is financially unstable. Creditors may monitor court filings, positioning them to sweep in and collect against the inheritance.
- Probate is slow. The New Jersey probate process is more efficient than most, but even informal probate involves waiting periods. The administrator must send out notices, publish notice to creditors, and allow a legally-mandated period for responses and claims. Some alternative means of passing property, such as a living trust or joint ownership with rights of survivorship, allow the deceased’s designees to receive the benefit of the property immediately, or nearly so.
- Probate can be labor intensive. The probate statute sets forth very specific requirements, including notification of all natural heirs, an accounting of estate property that must be filed with the court, valuation of property, notices to creditors, and much more. Often, management of the estate falls to a spouse or other close relative, who is already taxed emotionally and burdened by practical issues in the wake of losing a loved one.
- Probate can be expensive. Many people believe that a will and probate is a more cost-effective way to manage succession than a living trust, because the up-front cost for creating a will is typically lower than that associated with the creation of a living trust. However, with a will and probate (or intestate succession), the bulk of the costs come at the end. Probate involves a great many expenses, some fixed and some dependent on the nature of the estate. These include filing fees, attorney fees, title transfers, costs of experts for purposes such as determining the value of property, and more. Thus, a smooth probate process may cost thousands of dollars. A large or complex estate, or a probate case involving litigation, my cost much more.
- Probate litigation can deplete the estate. Because all natural heirs must be notified—even those who have been explicitly disinherited—probate opens the door to challenges and litigation. Of course, litigation is time-consuming and stressful. A will contest will delay distribution of assets, and may put intended heirs at risk. Even when a will contest or other estate litigation fails, the estate may be significantly diminished by costs of litigation, undermining the deceased’s intentions.
Estate Planning is Personal
Though there are good reasons to avoid probate, no one approach is right for every family. Choosing the right estate planning tools for you and your loved ones requires careful examination of your circumstances and goals. An experienced estate planning attorney can help you put together the comprehensive plan that best suits your needs.