Have you been told to avoid probate at all costs? With the reduction in court probate fees and the availability of informal probate proceedings, probate in Utah is generally not as painful as it once was. In fact, in some circumstances, probate might be advisable. However, because assets passing through probate are disclosed to the public, making them easier targets of fraud and frivolous claims, and because probate provides a forum for disgruntled family members, creditors and third parties to bring claims against the estate, we generally advise clients to avoid probate to the extent possible.
Deciding whether to subject your estate to probate is a fact-intensive process, one we can help you navigate. If your goal is to avoid probate, we try to help you accomplish this objective by using properly funded trusts, small estate affidavits where applicable, and other key estate planning tools. If probate becomes necessary, we are prepared to provide the expert advice and representation needed to navigate the probate process.
WHAT IS PROBATE?
Probate is the court-supervised process of paying an estate’s debts and taxes and transferring property that does not have built-in transfer mechanisms (“probate property”) from a deceased person to living persons. Probate property is property owned 'solely' in the deceased person’s name. By contrast, “non-probate property” is property that has built-in transfer mechanisms and includes 'jointly' owned real estate, 'jointly' owned bank accounts, property held in a trust, and death benefits for named beneficiaries on life insurance and other pay-on-death contracts.
There are several drawbacks to probate. First, assets passing through probate are disclosed to the public. Second, probate provides a forum for would-be beneficiaries, creditors and other third parties to bring claims against the estate where they otherwise might not be inclined to do so. Third if you own real property in another state in your individual capacity rather than in joint tenancy or in trust, then you will have to open an ancillary probate in that state, adding headache and expense to an already difficult process in your own state. Finally, court filing fees, attorney fees, statutory waiting periods and court formalities almost always make it more expensive and time consuming to administer a probate estate than a comparable non-probate estate.
One of the key benefits of probate is that, in highly contested cases, once the judge signs the final order closing the probate estate, family members and creditors and other third parties are forever barred from bringing claims against it. In most cases, however, the drawbacks of probate outweigh its benefits. At HBAA, we do our best to help you plan around probate.
HOW CAN I AVOID PROBATE?
There are two keys to avoiding probate:
- Make sure your property is non-probate property. You can convert property to non-probate property by transferring title thereto to your trust, by naming your trust or a third person as beneficiary thereof in the case of pay-on-death assets, or by adding a person to the title thereto so the property is owned in joint tenancy. These activities should be attempted only with the assistance of legal counsel, given the tax, state law, and other implications.
- If you do have probate property, make sure it does not include real estate and does not exceed $100,000 in net value, excluding up to four motor vehicles, trailers and/or boats. Utah law allows your executor to collect and distribute probate property within these parameters via “small estate affidavits” instead of through a probate court proceeding.
With proper planning, you can transfer an estate of very modest means up to multiple millions of dollars without subjecting it to probate. At HBAA, we do our best to help you steer clear of probate.
WHEN MIGHT PROBATE BE ADVISABLE?
In cases where an estate contest is likely, or where the beneficiaries strongly disagree about the deceased person’s intentions, or where purported creditors are threatening legal action against the estate, it may be advisable to probate the estate. But this decision should not be made without carefully considering various other factors, including the client’s tolerance for risk, the likelihood of success of adverse parties’ claims, and the types of assets involved.
An estate that has been probated carries with it the weight of a final court order; and it provides clean title to the probated property. If a disgruntled family member, would-be creditor or other third party fails to contest the probate estate within the statutory period for doing so, he or she is forever barred from bringing a claim later.
The attorneys at our firm can help you decide whether your estate should be probated. In those cases where probate is advisable or necessary, we are prepared to help you navigate the probate process if you have been named as the executor or personal representative of a loved one’s estate. [See also Disputes & Litigation]
To request a free consultation or for more information, click here
Other areas of practice include:
- Estate Planning
- Estate Tax Planning
- Asset Protection
- Business Structuring
- Trust Funding
- Estate Administration
- Trust Administration
- Disputes & Litigation
To contact us or for more information, click here.