Myth Busting: A Will Avoids Probate
Many people believe that once they have created a will—whether drafted by an experienced attorney, or using a DIY solution or online form—they will have avoided probate. Unfortunately, they are wrong. This estate planning myth is in desperate need of busting.
A will guarantees probate!
While a will is a great way to designate a person to settle your affairs once you have passed, determine who will get your hard earned savings and property, and, if necessary, appoint a guardian to care for your minor children, it must first be proven as a valid legal document by the probate court before its terms can be carried out.
The level of involvement by the court, the length of time it takes to complete the process and the total cost can all vary depending on the circumstances. In short, probates are costly, take more than a year to complete, cause delays in accessing funds and are open to the public.
But, if you have a will, is probate always necessary?
There are three general circumstances in which probate can be avoided:
- Joint ownership of assets with a spouse or other individual
- Proper beneficiary designations on retirement accounts and life insurance policies
- Trust ownership of assets
The failure of any one of these would result in the use of the will. And as we just learned, when the will is used, the courts are used because…a will guarantees probate!
Consider Matthew and Stephanie, who have all of their bank accounts titled in their joint names as husband and wife–all except one, Matthew’s “play money.” His account is owned in his name alone because he reasoned, “I have a will.” Upon Matthew’s death, Stephanie walks into the bank requesting access to his account and is surprised to learn that she needs a court document to make that happen. And since the account balance at Matthew’s death was more than $25,000, Stephanie is required to use a slower, more costly probate proceeding.
If Matthew had added his wife as a joint owner or a TOD (Transfer on Death) payee, or even better, retitled the account to his trust, he could have saved Stephanie the time and trouble of probate. Instead, Matthew’s will…say it together with me…guaranteed probate.
We are here to help answer any questions you have about estates, wills, or probate. Together, we can make sure that your estate doesn’t give you any unwelcome surprises! If you want to determine if your existing estate plan needs attention, take our brief online diagnostic survey.
