How To Eliminate Probate At your Death

I used to live in Texas. One of the things that I found interesting about the county seats in that State was that the offices that surrounded the town square of the county seat were dominated by law offices. This puzzled me for years until I realized that most of these lawyers were making their money by doing probate work. What better place to have an office that right across the street from work. I also discovered that these same lawyers were mostly responsible for getting the probate judge elected. This was because that judge was responsible for appointing a lawyer to the counties probate cases. What a sweet deal. I can guarantee you it’s the same in every State. Probate cases are a cash cow for law firms.  But what is probate?

Simply put, probate at death, or more specifically final probate, is the legal process that transfers ownership of your or you and your spouses titled assets, other than beneficial instruments, to your heirs or other persons. It’s the law.  If you own titled assets in your name (money and or real property) those assets must be probated to transfer their title at death. This fact will become crystal clear if you ever receive an inheritance of property that has not gone through probate and then try to sell it. You will find that you are unable to because legally it isn’t yours. Why? Well a deceased persons name is on the deed that’s why! You have to go through Probate Court first to remove their name and transfer title.

Do wills have to go through probate? Absolutely! If you have a will and your heirs want to receive the titled assets in their name you essentially have an engraved invitation to Probate Court. All wills go through probate period. If you don’t have a will, don’t fret, when you pass away the State will write one for you.

Is probate a bad thing? Well, that’s like asking is the flu a bad thing. Some people get the flu and are uncomfortable for awhile. Some people get the flu and become deathly ill and some people die. Probate is exactly like that. Sometimes it’s unpleasant. Sometimes it’s harsh and offensive, but many times it’s devastating both emotionally and financially to families. That’s just the way it is. But unlike the flu, probate is completely voluntary. You don’t have to go through it if you arrange you estate correctly.

What’s wrong with the probate process? Several things from my perspective. One, it is a public forum. Let me ask you a question. Would you let a stranger go through all your financial records? Of course not. But when you die all your private affairs legally become public record. All  details about your life, specifically your will and a complete and detailed inventory of all your assets including your financial records, become public record available to anyone with an inquiring mind and a telephone. Do you find that hard to believe? Try it for yourself. Call the probate clerk in the county you live in and ask them to send you the probate record or the will of any deceased individual that died in that county. If you don’t know a name, have the clerk pick one at random for you; they don’t mind. The cost if you request this information be sent is generally $1 a page. All probate records are public information that has to be released on demand. If you have the time, stop in at the clerks office and you can browse through all the records they have on file for free. The clerks can even show you the ones that are being contested.

Which brings me to my next point. Your will has no inherent legal authority and can be challenged by anyone. Are you surprised? In probate court the judge even refers to the language in your will as “allegations”.  Not facts mind you, but “allegations.” Do allegations have any legal authority. The answer of course is no.

Because of this wills can be and are contested regularly. Shocking  isn’t it? I can’t tell you how many times I have talked to people who thought that their will was carved in stone and no one, especially a family member, could contest or challenge it. Unfortunately that is simply not the case. Any person  for any reason can contest your will and the court has to stop the proceeding and hear their argument. That doesn’t mean that all contests are successful, they’re not, but even the unsuccessful ones can be costly and exasperating to the heirs. Consider this example.

I once knew a lady whose mother had passed away. The mother made several false assumptions about her will and estate. They were: 1) At her death her will would be settled in a timely fashion; a month or two at most and 2)  No one could contest her will period. Here is what actually happened. A sister in law who wasn’t an heir contested the will. The sister in law was upset that she didn’t receive an inheritance. Her contest was eventually unsuccessful but she severely damaged the estate in the process. Because of her, the probate was extended an additional 18 months and cost the estate $80,000.00 in additional attorneys fees. Total time in court over two years. Total attorney fees over $130,000.00. All that grief from a false premise.

Anecdotally, I can tell you several other stories of families slugging it out in probate court fighting over their deceased parents estate. It’s not very pretty and in all cases families are ripped apart. Don’t think it can happen to you? Don’t be to sure, attitudes and other wise good children can change rapidly when found money is on the horizon.

Is there a way to avoid this process and to have some certainty that your wishes will be carried out. Absolutely! You can set up a Revocable Living Trust. If the trust is properly written, executed and funded you still retain absolute control over all your assets. At your death however  there is no probate court proceeding, no lawyers and no lost time or lost money. Your estate can be settled literally in about an hour or so. The other exciting advantage of a trust is that a properly drawn trust cannot be overturned or successfully challenged. Now that’s exciting. Fights usually never get started when the parties realize that the Trust is all but unchallengeable and unbreakable. With a trust your wishes have a 100% certainty of being carried out; there are no court proceeding involved, no attorneys to pay and no months or years in court. Amazing! Another exciting aspect of a trust is that they are completely private. There is no inventory filed at the clerks office and no public record of your assets.

© Richard Woodling 2012