“’Probate’ is one of the dirtiest words in all of estate planning,” quips Tom Nawrocki in LifeHealthPro. Many clients focus on setting up their estate and their will with the express purpose of avoiding probate, he explains.
The word “probate” refers to a court procedure in which the financial affairs and the property of a person who has died are legally settled. In fact, in Marion County, Indiana, the largest court system in the state, there is a separate court just for probate matters. As a general rule, property that you own when you die needs to go through probate, unless it qualifies to skip the probate process. There are generally four categories of property that qualify to avoid probate:
- Property that is owned through a trust
- Financial accounts that have named beneficiaries (retirement accounts, annuities, life insurance, bank or other accounts with beneficiaries
- Property held in joint tenancy
- Very small estates (under $50,000 in Indiana)
Why do people think of “probate” as a dirty word in the first place? Two reasons: delay and expense.
What causes delays during the probate process? Sometimes property can be tied up and inaccessible to heirs for months and even years. If proper planning hasn’t been done while the property owner is alive, there might be disputes as to who is the new owner of a property. Creditors’ claims and tax issues might create the need for legal research, document drafting, or court appearances by probate attorneys. Waiting for real estate to sell can sometimes take months or years.
The average cost of probate in Indiana is 2 to 4 percent of the value of the estate. There are also court costs, publication and bond charges, property appraisal fees, and other expenses.
At Rebecca W. Geyer & Associates, our attorneys are often called upon to help heirs of family members who never took advantage of probate avoidance estate planning tools. Our goal is to minimize the emotional strain on those family members after the fact. Often individuals do not know where to begin when someone dies.
We provide full-service estate administration services to guide families through the probate process and take the “dirty” out of the word probate!