Probate - Many Things I Didn’t Know.

Jules

Jules

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We did our wills years ago and basically they are reasonable. Since then probate has changed significantly here and probate fees have skyrocketed. We’ll now have to do some investigation on possible changes that may need to be made.

After a memorial service one of the people told us the estate is still tied up in probate after a year and will probably be for a few more months. There’s lots to inherit and in the meantime they have possession of the family home and inadequate money to maintain it properly. They were lucky they could move into the home rather than it sitting empty.

The father who died thought he had things arranged to be reasonably straightforward.

The lawyers must be making a fortune.

The idea of our home sitting unsellable for a year shocked me. I’m now thinking we should seriously consider moving into rental before then. It may not be our problem when we’re gone, though I sure don’t want issues for the kids.
 

Here probate is only required on estates in excess of $50,000.00.

My work around has been to place beneficiaries and pay on death designees on bank accounts.

That leaves my vehicle and personal possessions.

I wouldn’t sell a home to avoid probate but it might be worth talking to an attorney about other options.

Good luck!
 
Due to probate being expensive, wills are only good for a backup.
Preparing your own living trust is the best, as there is no probate involved.
I prepared one for my spouse and myself a couple of decades ago by photocopying
a couple of examples from a Nolo Book at the public library, and also looking at examples online.
Then I typed our own living trust using the other ones as examples, we had it notarized and recorded.

When my spouse passed away, I took a copy to the county recorder in order to update the recording.
Now it is time for me to update the trust, primarily regarding the beneficiaries, which is not an easy decision.
As @Aunt Bea has stated, financial accounts can be handled within the specific institutions and backed up by the trust.
 

In Ohio, the lawyer fees are set by law. My husband was the executor & our attorney helped us to keep everything legal & done on time. If you think you can do it by yourself & make sure everything is correctly & legally, I believe your are wrong. Our attorney earned every penny he made & we had peace of mind that we weren't going to be fined by the court for any errors.

Our friends Dad, who passed the day after my MIL, had everything set up as Transfer on Death (TOD). Nothing went thru probate & it was done very quickly with months with the house being sold, etc. It was a 1 1/2 years for my MIL to be settled & there was nothing that needed to be disputed.

We have a will, but we are starting to do TODs on some things. It made us a believer.
 
These laws and situations always keep changing! My father had a "Pour Over Will" (which puts everything in the trust) and a trust and it still took over a year to get everything taken care of. First - the state of Pennsylvania wanted their cut - trust or not. The tax would be discounted if we could "estimate" the amount in 3 months. After we paid that (BIG estimate), we waited 7 months for them to decide if we had been accurate enough (we were, Phew!)
Second - he resided in a retirement community. They would happily pay back the "deposit" (which they would split between my father's estate and my his late wife's family) BUT only 60 days after it "re-sold." That took a year and 4 months so my sister and the attorney's were finally able to settle all 16 months after Dad died. My sister was able to dole out cash to each of us, along the way, as long as there was enough to cover forseeable fees.

One other caveat: I DO NOT Recommend naming a MINOR CHILD as a beneficiary. (Look up "Gary Coleman Laws") If you leave $$ to minor grandchildren - their parents will have to go to court to be legally named ( lawyer fees ) as Guardians in order for them to receive the funds. THEN, you are only allowed to invest those $$ a certain way OR post a bond. IF you want to add to or withdraw from those funds - you need a COURT ORDER (lawyer fees) to do that. You are also supposed to make an ANNUAL accounting to the court (lawyer fees).

The Law firm we used when our sons were bequeathed $$ from a great-aunt, "did us a favor" by combining all 3 sons in one judgement and only charging us one fee. No financial firm would handle a "guardianship" account but we finally found one to work with us (Thrivent). We petitioned the court to allow us to invest in a mutual fund (lawyer fees) and that was granted. As they each turned 18, we were back in court - 3 times, besides the annual accounting (lawyer fees) to transfer the $$ directly to the boys. Ultimately, they each opted to keep one parent name on the account so we could withdraw funds for college fees.

NOTE - part of the law also allows the child (or children) to SUE THE PARENTS if they feel the money was not invested properly in their best interest.

It could have been done SO much easier if we had just talked to the Aunt. If she had left the $$ to my husband (her nephew), we would have honored her wishes and set up accounts for each boy on our own.
 
In our area, it costs about $2500 to have an attorney set up a family trust and prepare all necessary related legal documents. Everything we own is held in the name of our trust. When we both die, the trust immediately becomes the property of the designated beneficiaries. NO probate necessary.
 
FYI for those who have an RLT: check your state laws to see if the trustee or successor trustee is paid or not. In our state, the executor of a will gets a set fee, but a trustee DOES NOT. Unless the trust specifically allows it, a trustee is not paid for their time spent.

Even with a trust, it takes some time to settle an estate. During that time, all bills must be paid and the estate kept intact for distribution until the trustee has the death certificate. I don't think anyone can state with 100% certainty that they will die without any questionnable circumstances that might delay issuing the death certificate. Maybe 998 out of a thousand will be a simple issuance....but what if you're one of the 2 whose deaths are NOT clear-cut?

When my spouse and I were younger, our estate was simple. It got more complicated with the purchase of a house, and has become increasingly complicated as our assets have increased. A successor trustee will definitely need to spend considerable time on our estate. I have personally settled 2 estates: one with a will, and one with a trust. The latter was as easy as one could make it, but nonetheless took a surprising number of hours.

Also, having a trust does not mean the trust cannot be challenged by an unhappy beneficiary. I worked for an independent CFP whose client died, and the three children (all grown) ended up having to spend almost the entire worth of the estate in legal fees because one daughter disliked her brother, who was the executor, and sued him to block distribution of the assets. She didn't care if she lost the suit! She was just being vindictive towards her siblings.

Her parents had done everything they legally could, but in the end, it didn't really help. A substantial inheritance was reduced to almost nothing because of childish spite.

An old proverb says, never say you know anyone until you've split an inheritance with them. I learned that was VERY true, even in my own family.
 
@Lethe200, I'm believe the parents wanted it split fairly among their family. But I wonder if that one kid was like that growing up & as an adult over the years?

That made me think that if you had your property/financial items TOD to who you wanted it to go to, that law suit may have been avoided. With nothing to go through probate & that decision being final, I look at TOD's as a direct gift after you have passed given to exactly who you wanted.

I also agree that you need to have back up trustees. I know when my Mom updated her living will & related things, her attorney made sure there was a back up in case the primary person wasn't or wouldn't do it. He was also adamant about not having a co-executor or co-trustee in any type of legal matter. He gave his reasoning right then about seeing two people butting heads when decisions needed to be made & it became an impasse. I'm glad he did her that way because that is what I would have faced with my brother.
 
@Lethe200 ….boy oh boy are you so right about trusts. My guy is 2 years out from his fathers death. The trust divided equally into 4 parts. Should be easy…right? Uhhhh…no. Somewhere around 200000 in legal fees later we go to court at the end of this month. In retrospect…the trustees should of refused their duties and petitioned the court for an appointed trustee. Much cheaper.
 
Muskrat said:
@Lethe200 ….boy oh boy are you so right about trusts. My guy is 2 years out from his fathers death. The trust divided equally into 4 parts. Should be easy…right? Uhhhh…no. Somewhere around 200000 in legal fees later we go to court at the end of this month. In retrospect…the trustees should of refused their duties and petitioned the court for an appointed trustee. Much cheaper.
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Similar to what happened with my mom & stepdad's trust; it took about 2 years to settle it too; I've never been through such a tiring, sad experience. (Somebody told me that it was because the attorney who did the trust for my parents was not a trust attorney. Live and learn.)
 
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