What is Probate?

Probate is the legal process of presenting your will to the Circuit Court after your death to authenticate it, get it recorded, and appoint your Executor (if you don’t have a will, the Circuit Court will appoint an Administrator of your estate). The Circuit Court usually acts through the Clerk of the Court, and a court officer, called the Commissioner of Accounts, who will oversee the process of distributing your will, which includes making sure that the Executor or Administrator provides an accounting of your estate, pays all debts and taxes owed by your estate, and distributes the property in accordance with your will.

Your Executor or Administrator must be appointed by the Court in order to collect and distribute your assets as stated in your will. However, because it is a legal process, there are many steps that must be followed before your Executor can be appointed. If you have a will, a beneficiary can still challenge it by appealing the judgment to Circuit Court within 6 months of the Order of the Clerk admitting your will to probate.

If your estate is smaller than $50,000 (not including any real property or any accounts that pass outside of the will or outside intestacy), an Executor or Administrator is not required, but some accounting requirements still apply.

As you can probably tell, even if you have a will, there are still many legal requirements that must be followed before your estate can be distributed.

If you do not have a will, your estate will still have to go through probate before your estate is distributed, but the process is much more unpredictable and can be very costly if someone challenges either the appointment of the Administrator, the designation of a beneficiary, or the distribution of an asset. For these reasons, many people choose to avoid probate, but if all of your heirs agree and your assets are centralized, it can go smoothly, but why leave something so important to chance?

Revocable Living Trust

Having a revocable living trust (RLT) is a way to completely avoid probate and control exactly how your assets will be distributed when you die. This type of trust is typically referred to as a RLT and is often used as a substitute to your will, or it is used to distribute a bulk of your assets when you pass, allowing the will to be used as a supplement for only minimal assets. A RLT permits you to keep total control and access to all your assets during your lifetime, and provides for the distribution of your assets to your beneficiaries at your death. We often refer to a RLT as your “book of instructions.” Everyone – both young and old – can benefit from a RLT. Other advantages, when property drafted, can include:

• Asset protection for your spouse after your death.
• Special needs planning for disabled beneficiaries.
• Asset management and protection for children who are not proficient with handling money.
• Protection of assets from a spouse’s subsequent remarriage after your death.
• Disability planning in the event you become disabled prior to death.
• Asset protection for your child if his or her marriage should fail to ensure your assets are not part of a divorce settlement.
• Keeping your affairs private (as opposed to open for public review in probate).
• No court intervention required (handled entirely by the Trustee you name in accordance with your detailed instructions).
• Plan for proper management of your business in your absence.

But Note: Very few RLTs provide these benefits. Only a qualified estate planning attorney will know how to incorporate these protections into your plan. While a RLT has many advantages, it does not protect your assets from a nursing home, lawsuits, divorce bankruptcy or other creditors.