Estate Planning Misconceptions:
Wills Avoid Probate Court
Many have had to experience the process of probate or estate administration in their lifetime, however, most do not understand or misunderstand exactly what happens in this process. Most everyone has seen a movie or television show that portrays this process as the whole family sitting in a room with an attorney, and the attorney plays some cryptic video from the decedent or reads a letter written by the decedent in anticipation of his or her death.
Then, the attorney reads what is presumed to be the decedent’s final wishes for the distribution of his or her assets. The surviving family members rejoice or gasp at the results. While this scene makes for good drama or comedy, depending on what you are watching, it is not an accurate portrayal. So, what is true?
Many believe that if they have a will, then probate does not occur. This is not true. Probate is a process. It occurs when someone dies, whether that person had a will or not, and when an interested party petitions the court to commence probate proceedings. Probate is a legal process that determines the distribution of your assets, or estate, after you pass. A will does not determine whether probate occurs. What a will does is act as a set of instructions for a probate court. In probate, a court makes sure that your debts are paid, that your will is legally valid, and that your remaining assets are distributed according to your intentions in your will, among other things.
Now the question becomes, what happens if I do not have a will? The probate process still occurs, assuming that an interested party commences probate proceedings. Every state has a statutory framework that sets out what happens to a persons assets if he or she dies intestate, which means without a will. So now you are thinking, why in the world would I make a will if the state has a plan for me? It seems like having a will is just something rich people spend money on to brag to their friends about while smoking on cigars and playing the back nine at the country club. Well, I cannot speak for the cigar smoking, rich golfers, but the point of making a will is you get to control what happens to your assets. Without a will, you lose complete control over your assets, which creates a number of problems.
For example, not having a will could result in part of your assets being distributed to a family member that you have never heard of or is extremely distant, who you have never met in person. These family members are referred to as “laughing heirs” because they are more likely to feel excitement and happiness after your demise than sorrow or remorse. Think about it, an attorney calls one of these laughing people up and says, “hey Chuckles, your great great uncle, twice removed, once reinstated, then removed again died. He did not have a will. Our firm did some research and you have a right to part of his estate. Once probate closes, you will be receiving a check for $250,000. Will that be a problem for you?” What do you think Chuckles first thoughts are? I highly doubt they are, “man, I cannot believe he died. He was such a great role model in my life.” N0, Chuckles is booking a trip to Vegas so he can, “let it ride.”
So, what is the takeaway? Chuckles has a gambling problem. No, that is not it. It is that probate is a process that determines what happens with your estate, and if you want control of what happens to it, execute a will so that the probate court knows what to do with your assets. The last thing you want is part of your estate that you worked hard for to end up on a craps table in Vegas.
If after reading, you think you may need a will, or would like to discuss other estate planning options, send the author of this article a message here. Other than being incredibly witty, Mr. Cardwell is very experienced in helping clients plan for the future.