When it comes to estate planning, I hear many different opinions. There are many people who say that probate should be avoided at all costs. There are others who say that it is not that bad. In fact, there are still others who say it is simple, so long as you name beneficiaries on all of your financial accounts. I have encountered this sentiment among financial advisors, banking professionals, and others in the financial services industry.
So, the question remains, is probate easy and do I need to worry about it?
To answer that question, let me tell you the story of two families whose estate went through the probate court system.
In this first case, the estate had very little amount of assets. However, there were a lot of creditors. It was what attorneys call an insolvent estate. Nearly all the bank accounts were taken care of by beneficiary designations and transfer-on-death (TOD) designations. This is what many may call, an easy and simple probate. Well, was it? First, the case was required to be open for four months. The estate could be reopened for up to two years if someone decided to contest the estate or bring the financial accounts into the estate in order to contest the estate. It still required a filing of initial pleadings with the court. It still required the family members to have to take off work and go to court to attend a hearing with their attorney. There were still attorney fees and court costs that were due. Finally, there was still the daily hassle of dealing with creditors of the estate calling to collect on their debts.
You answer it yourself … does this sound like an easy probate? It sounds like a hassle to me!
In this second case, the estate was valued at over $500,000. There were only a small number of creditors. However, there was no Last Will and Testament. Finally, there were only two heirs (a brother and sister). What do you think happened in the probate estate?
The family needed to hire an attorney. Next, the attorney had to file an initial set of probate pleadings with the court. The attorney had to petition the court to name the brother as personal representative of the estate. A TennCare release had to be obtained. Numerous affidavits and accountings had to be filed with the court. Finally, debts had to be paid and the remaining property distributed to the brother and sister. Just as in the first case, the estate had to remain open for a minimum period of 4 months, and it could be contested by any heir with a lawful claim to the estate for a period of 2 years. Also, don’t forget, the family had to open estate accounts, had to file tax returns, had to hire an accountant to complete all the tax work, and eventually, the estate was closed. However, this was not before several days taken off work, several court hearings, numerous court filings, attorney fees, and court costs.
Is Probate easy? Is there such thing as an easy probate? I would argue no!
Even in the simple estate scenario that I described above, it still resulted in hiring an attorney, going to court once, taking off work once, and dealing with the legal issues surrounding the death of a loved one. Not to mention, the daily calls from creditors of the estate.
If you feel it is time to sit down and schedule a time to speak with a Tennessee Estate Planning Attorney to create the perfect estate planning strategy for your family in order to avoid all the problems that come with the settlement of a probate estate when a family does not plan, please CLICK HERE to schedule your Estate and Legacy Planning Strategy Session!