In recent columns we have been discussing the various efforts that have been employed nationally to avoid the probate process. Certainly, progressive states like California have led the charge in finding and implementing methods and techniques to avoid probate.
The vilification of probate extends nationwide and affects the perceptions of everyone.
As an example, many articles are available that discuss the role of trusts in estate planning. They often advocate that every effort should be made to avoid probate.
But, is this really the right conclusion? Not always.
Probate is a carefully conceived, time-tested procedure designed to protect your intentions regarding the distribution of your assets after death.
Probate provides a final closure to creditor claims against the estate and imposes the power of the court to insure compliance with a decedent’s wishes.
Probate requires that a person’s financial assets be defined, insures that they will go to the proper persons and provides a procedure for protecting the distribution planned by a decedent.
• Risks of No Probate. There are risks associated with using a trust rather than probate:
1. Trusts do not Prevent Legal Contests. When persons are left out of the terms of a trust, or trust assets are improperly restricted in their use, there are legal means available to contest. Such contests are becoming more common and beneficiaries or other interested parties can initiate a contest.
Undue influence and similar challenges can be made particularly if a trust is drawn within a short time prior to death.
2. Trusts do not include many of the protections of probate. A will requires two or more witnesses, certain written testimony of the witnesses and notarization. A trust can be drawn with only a signature and even implied in some instances with no written document.
Therefore, it may be easier to create an improper trust than an improper will.
3. Simplicity and Ease of Execution Invite Misuse. Whether the document is a trust, a transfer on death account, a joint ownership or a simple deed, it is easier to have an elderly or marginally capable individual sign a single document, such as a trust, then to have that person pass the scrutiny of two witnesses and a notary as required for a will.
The Conclusion. The use of alternate techniques other than a will and probate may often be simpler and perhaps easier to implement and administer after death.
However, unless carefully planned and completed well in advance of death, such techniques can result in family conflicts and court challenges.
Thus, planning, implementation, and communication remain the best antidotes to conflict after death.