There is a lot of information about probate and a lot of information about trusts that people receive from their friends, family members, and even on television. Unfortunately, most of it is not accurate. However, one fact does stay constant, many families that go through probate end up dealing with a stressful process that is much longer than any of them ever considered, exposing their family’s private financial matters to the entire world to see.
Therefore, I’d like to tell you the story about Joe & Elizabeth. Joe and Elizabeth had been married for nearly 40 years. Joe passed away following a short illness. After Joe’s death, all Elizabeth wanted to do was sell the home, move into a small home, possibly near their two daughters. However, Elizabeth had to go through a probate court process when Joe died which included admitting the Last Will and Testament to the probate court, listing all of his assets and debts with the probate court, and waiting on a judge to sign off an order closing his estate and allowing Elizabeth to proceed with the sale of the family home. This process took nearly 8 months. However, it is what happened when Elizabeth passed away two years later that caused the surviving family the most problems.
When Elizabeth passed away two years later, the probate process was even worse. Elizabeth had always assumed that Joe took care of everything including all these planning matters. Unfortunately, she was wrong. Elizabeth never even had a Last Will and Testament. What resulted was a long and draw out probate court process, even though Elizabeth only had a small estate. In total, Elizabeth had an estate totaling approximately $245,000. Elizabeth owned a small condo worth approximately $175,000, modest personal property totaling $7,500, a car worth $12,500 and bank account with $50,000.
The first problem that Elizabeth’s two children ran into was that they could not even access the bank account to pay for the funeral expenses. They had both been told that Elizabeth’s bank account was frozen and that they needed to go through probate court first in order to be given access to the bank account. The two children ended up paying for the funeral themselves using their credit cards and personal savings.
The next problem that the children faced was filing the initial set of documents with the probate court and having one of them appointed and confirmed as the administrator of their mother’s estate. At this point, Elizabeth’s two children hired an attorney to represent them and handle the settlement of their mother’s estate in probate court. It took Elizabeth’s first daughter Ashley, about 4 months to be named as administrator after her mother’s death including filing all the necessary documents with the court and waiting on the judge to schedule a hearing to name Ashley as the administrator.
At this point, Ashley had to file a detailed accounting and inventory of all the assets and debts of her mother that became a part of her probate estate. In addition, Ashley had to get permission from the judge before any assets were spent out of the estate on all the bills that were due including her mother’s credit card, electric bill, water bill, mortgage payment, and final medical bill just to name a few.
In addition, Ashley needed to have her attorney file a series of documents with the court to in order to be able to sell the condo that her mother owned and pay off the existing mortgage on the condo.
Finally, approximately 11 months after her mother died, the probate estate for her mother was finally settled. However, during that 11 month time frame, Ashley spent $15,000 on attorney’s fees, costs, and other miscellaneous expenses on the probate estate settlement.
The more unfortunate aspect about this story was that the $15,000 in costs was completely avoidable. If Ashley’s mother, Elizabeth, had set up her estate planning in advanced, she could have avoided the entire probate court process for the two daughters that she left behind. In addition, the financial cost of setting this up would not have even been half of the $15,000 in costs that Elizabeth’s daughters incurred in settling their mother’s estate.
If you have questions or concerns regarding the proper comprehensive estate plan to put in place for your family to ensure a smooth transition of your wealth to the next generation, then please contact our office for a complimentary visit so that we can discuss your estate planning needs and concerns in further detail.
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