Have you heard that you should do everything possible to avoid Probate? Although Probate is not that dire, here are three common reasons some people desire to avoid Probate; its public nature, time and cost.
What does it mean to avoid Probate due to its public nature? Well, Probate is a civil lawsuit. As a lawsuit, the information supplied to the Probate court is available to the public as required by law under the Freedom of Information Act.
The length of time required often depends on the parties involved and the complexities or simplicities of each family and its members. However, in Idaho, most Probates take anywhere from 6 - 12 months to resolve, with a minimum required time of 6 months.
Price is often the most important factor up front. You should be prepared to pay anywhere from $2,000 to $5,000 to Probate your Will. In many cases your final cost will also include these “fixed costs” of court costs, attorney fees, the cost to publish the Notice to Creditors, and other incidental expenses.
Armed with this understand, here are a few methods in which people attempt to avoid Probate on their own. These methods are not being recommended as a blanket statement, as they have serious hidden traps.
“Payable on Death” or “Transfer on Death” designations can be added to many bank accounts and brokerage accounts. When the account owner passes away, the funds that remain in those accounts will be distributed to the named beneficiaries without having to go through Probate.
“Joint Tenancy” ownership can also avoid Probate. A JTWROS can be used for bank accounts, vehicles, and real estate. When one of the Joint Tenant owners passes away, his or her share disappears and the property is thereafter wholly owned by the remaining Joint Tenant.
“Devolution Agreement” is where property owned by a married couple can pass to the surviving spouse when the first one passes away. But, this can’t be used unless there are no other intended beneficiaries of the property. As this option is only available to a married couple, you will not avoid Probate when the second spouse passes.
Each method, taken individually can on the surface avoid Probate for whatever property it has authority over and no other. Also, without further intervention Probate will be an eventuality for someone down the road.
There is one option not mentioned that can avoid all of these concerns. That is a Revocable Living Trust. If you properly create it and fund it, a Trust can avoid the public nature, time, and cost of Probate. That is way so many clients prefer to create a Trust.