7 Common Myths About Probate

Our partner attorneys hear a number of common probate myths. While probate is an important part of legacy planning, it’s infrequent enough for most people that misconceptions about probate persist.

Probate naturally comes at a difficult time. Even if you know that probate is the legal process for distributing a deceased person’s assets, you might not be focusing on the details. Start by dismissing these probate myths, and you’ll have a better understanding of how your probate attorney will help.

Myth #1: Having a Will Avoids Probate

A will provides clear instructions for asset distribution. Having a will in place can help streamline the handling of a deceased person’s estate, which may potentially help make probate easier.

A will usually does not eliminate the need for probate entirely. In fact, the will typically indicates who the deceased has asked to initiate the probate process.

A will certainly doesn’t exempt the estate from taxes or other potential challenges, especially in the case of a very large estate.

Additionally, if the decedent’s estate plan is not executed correctly, it may lead to family disputes in probate court. Any interested party can argue that a will was unduly influenced, ignores creditors, or is otherwise invalid.

Myth #2: There’s a Sure Way to Avoid Probate

There’s no foolproof way to avoid probate altogether. When a deceased person has significant probatable assets, like bank accounts, the process becomes inevitable.

Even with a meticulously designed estate plan and a beneficiary designation in place, some assets may still require probate under state law. While a named beneficiary can simplify the transfer of certain assets, probate may still apply to others.

In the end, probate remains a legal and court-driven process, often necessary to ensure the rightful distribution of assets among heirs and beneficiaries after a person’s death.

Myth #3: The Majority of Your Estate Will Go to Taxes

So-called “death taxes” like the estate tax and inheritance tax are a longstanding political issue. They rise and fall as leaders debate what’s fair to citizens and reasonable for the economy.

In reality, few people will deal with death taxes. The federal estate tax threshold – the level when the estate tax applies – is higher than the vast majority of estates. In 2023, the estate tax skips estates valued below $12,920,000. Sixteen states also have estate or inheritance taxes, but these are far less than the majority of an estate.

The old adage that “only death and taxes are certain” does have some truth. The deceased’s personal representative or executor will need to file taxes on income the deceased earned before they passed away. What’s more, the IRS will continue to pursue any back taxes owed by estates that have assets.

Beneficiaries of the estate will have their own tax considerations to handle, but the majority of one’s estate will likely escape taxation.

Myth #4: Probate Usually Takes Several Years to Complete

The uncertain length of probate frequently causes anxiety among family members. While you or your attorney can move to speed up the process, you’re still working on the court’s slow schedule.

Probate proceedings can vary in duration, but they rarely extend over several years. Probate can begin in several weeks, and can typically be finalized in 6 months to 18 months.

Myth #5: Probate Is Easy to Manage Without an Attorney

Many people believe they can navigate the probate process independently, particularly if they’re the oldest child or a knowledgeable family member. Executors appointed to manage the estate also play a critical role in ensuring the process’s proper execution.

However, the probate process involves intricate legal procedures that are frequently different in practice than they are on paper, making it unwise to go through probate without professional guidance. Relying on an attorney specializing in probate can ensure that the probate process proceeds smoothly. Unbundled attorneys can handle just the parts of the process that you select, potentially giving you representation for hundreds of dollars instead of typical $6,000 costs.

Myth #6: A Judge Will Take Over Financial Planning

The probate court oversees the distribution of a decedent’s estate. The court doesn’t make these decisions on its own. Rather, it appoints an executor to manage assets, settle debts, and ultimately oversee the distribution of inheritances per the deceased person’s wishes, as outlined in their will.

The executor, not the court, will do much of the humdrum financial work. They must adhere to the court’s instructions, and can be a family member.

Myth #7: The Deceased Can’t Give Things Away Before Passing

There’s no need for someone to wait until death to transfer their assets. A person can give gifts at any point in their life. Among other things, they can also transfer assets to a trust for the benefit of their heirs, set assets to co-ownership, or donate to charity.

Sometimes this is subject to taxes; other times it can be done tax free. There are annual and lifetime limits to how much one person can send without it being subject to federal taxes. For 2023 the annual amount is $17,000.

What’s important is that you don’t have to wait until the end to execute financial arrangements. Many accounts can be used by one person and then automatically passed along upon death.

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If you’ve got other probate concerns on your mind, you don’t have to face them alone.  Connect with an unbundled probate attorney for affordable help today.