The administration of your estate after your death, through the court system, is what is known as “probate.” Every estate in Fayetteville and throughout Arkansas, large or small, must pass through the legal process known as probate before heirs can receive their inheritance. The process is intended to transfer your estate in an organized manner, supervised by the court. There are some disadvantages to this required procedure, which lead some people to take steps to avoid probate. Whether probate should be avoided or not is a subjective decision. Understanding the disadvantages can be useful in determining whether avoiding probate in Fayetteville is the right thing for you.
Probate is open to the public
One of the more common reasons people try to avoid probate is the fact that it is a public proceeding. This means that anyone who may be interested can access your probate records, which are open to the public. This would include your will, asset information, identities of your beneficiaries and the claims of your creditors. All of this information remains public record. For some, this utter lack of privacy is reason enough to avoid probate.
Probate can be very expensive
Depending on how complex the assets and property in your estate are, the cost of probate can be very high. Common fees and expenses include court fees, accounting fees, appraisal fees and fees for the personal representative. If there is a business involved, there will also likely be business valuation fees. There are also other miscellaneous fees, such as mailing costs and insurance and storage costs for personal property. With certain estate planning tools, most of these expenses can be avoided.
Probate can take a long time
Going through the probate process, from beginning to end, can take months if not years to complete. Having a will can shorten that time frame because the administrator and heirs are identified in the will and the court will not have to make those determinations.
However, the process is still time-consuming because there are so many transactions that need to be completed. For instance, an accounting of all property belonging to the deceased is required. Real estate must be appraised in order to determine its value. Creditors must be found and notified. All of this takes time.
How can probate be avoided?
With the right estate planning tools, it is possible to avoid the probate process altogether. You can still ensure that your property passes to your heirs, without the time and expense of going through the probate process. Revocable living trusts, gifts, joint ownership of property and pay-on-death accounts and registrations are just a few examples of estate planning tools meant for just this purpose. With a revocable living trust, your chosen trustee will be able to simply transfer your trust property to the heirs you intended, without going through the probate process. Likewise, a payable-on-death account will be transferred automatically to your named beneficiary without the need for probate.