2 May 20210 Comments
“If I have a Will, I avoid Probate, right?” This is a question I hear all too often and, unfortunately, the answer is more complicated then yes or no.
Probate is the legal process that takes place when someone has a Last Will and Testament and passes away with assets titled to their name alone. It is a court proceeding necessitating the filing of one’s Last Will and Testament in the Surrogate’s Court of the county where the decedent resided and the appointment of the executor named in the Last Will and Testament as the fiduciary of the decedent’s estate. If someone passes away without a Last Will and Testament, a similar proceeding, known as an Administration Proceeding is commenced. So, in short, having a Last Will and Testament does not avoid probate and a probate proceeding would be necessary if there are assets held in the decedent’s name alone.
The following are some of the reasons one should try to avoid utilizing a Last Will that needs to be admitted to probate upon one’s death:
(a) Avoid the potentially significant legal fees and filing fees associated with the probate process.
While legal fees may vary depending on where one resides and the experience of the attorney retained, it is not unusual for the fees to be three to five percent of the decedent’s gross estate. Additionally, court filing fees associated with probate go up to $1,250 for an estate worth $500,000 or greater.
Unanticipated expenses can also arise where the court needs to appoint a Guardian ad Litem (an attorney) to represent the interests of any beneficiary who is a “person under a disability” or where a beneficiary seeks a formal accounting to be filed with the court for court approval. Expenses associated with ancillary probate proceedings may also arise where the decedent owned property in a state other than New York.
(b) The probate process can often take nine months to over a year to complete.
Even after the Last Will has been admitted to probate, there are filings such as the Inventory of Assets and Affidavit of Completion, which are required by the Court to be filed after a specific period of time. The Affidavit of Completion cannot be filed until at least seven months have passed and often it takes longer than that to completely marshal all assets, pay all debts, file all necessary taxes and ensure the beneficiaries have received an accounting and their proper distribution of the estate assets.
(c) The existence of a Last Will that needs to be admitted to probate increases the risk of a Will Contest.
When a Will needs to be admitted to probate, not only are the beneficiaries under the Will entitled to notice, but any distributee (person who would inherit under the Laws of the State of New York if there was no Last Will and Testament) has to be cited (served with notice) or consent to the Will being admitted to probate. This presents the opportunity for a distributee to challenge the validity of the Last Will on grounds such as lack of testamentary capacity, undue influence, fraud or duress. A Will Contest can take years to settle and the potential legal fees and expenses are significantly greater.
(d) Probate is public!
When one’s Last Will and Testament is admitted to probate, it is then on file and open for public viewing. Additionally, the nature and value of the assets comprising one’s estate, along with the chosen beneficiaries are outlined in the probate petition and inventory of assets. This lack of privacy is a sufficient reason in and of itself to avoid the probate process!
To avoid these potential problems, the use of a Trust, whether Revocable and/or Irrevocable should be considered as a tool to avoid the probate process and the potential costs and delays associated with it.