What is Probate?
Probate is a court-supervised legal process that follows an individual's death, whereby a probate court will establish the validity of one's will. During this process, the court essentially oversees the distribution of a person's asset after their death.
How does the Probate process work?
During the probate process, the court will hold proceedings where stipulations of a will are read aloud and inheritances get properly distributed. One of the first steps that take place during the probate process is identifying a person's assets. The court will look through the will, and inspect the inventory and accounting of things like property and other assets. Then based on the items listed, the court will identify its estimated value. The next step is taking care of a person's outstanding debts or taxes owed. If a deceased person owes any debts or taxes, it must be paid off to the appropriate recipient. Some of these debts may include mortgage’s, credit cards, student loans and medical bills. Once debts are settled, the remaining steps are to identify the beneficiaries stated in the will and distribute any remaining property to the proper heirs.
Advantages of Probate
Probate can be a very complicated and sensitive subject when it comes to involving a deceased person's family and friends. Some may not agree to how an estate should be handled or have disagreements on whether the deceased was of sound mind when making certain decisions in the will. Thus, issues can arise quickly. This is where probate court comes to an advantage, it gives a chance to beneficiaries and heirs to settle disputes and allow a neutral judge to make the final decisions.
- Part of the probate process is to ensure all debts and taxes of the deceased person are taken care of and settled. However, there can be times when some believe that a creditor is wrongfully trying to collect on debts to their advantage. Therefore, an advantage of probate is being able to challenge the validity of a creditor's claim, in order to avoid paying unnecessary debt that otherwise may have just been accepted.
- Another advantage of probate is the time limit it has on creditors to put in a claim. The time limits for this can vary by state. In New York the time limit is 7 months but other states could have as short as 90 days.
Disadvantages of Probate
- One of the predominant disadvantages of probate is the amount of time it takes to settle everything that needs to be taken care of. Though it varies by state, the probate process on average takes 12-15 months. Thus, some may prefer a more efficient route to be able to move on.
- A big disadvantage of probate and arguably the one that affects all parties the most is the cost of it. Expenses may vary by state but you expect to have various expenses such as court and filing fees, accounting service fees and estate expenses which may also affect what is left for beneficiaries.
- Finally, another disadvantage of probate to consider is that since the process is handled in court it automatically becomes a matter of public record. Personal finances and details of one's estate are easily available for anyone who searches it up, thus it sets a limitation on your privacy.
It is important to note that there is no set rule for when or who should use probate or not, because everyone's situations may be unique. There may be circumstances when it could be used to your advantage and others where it's advised you don't. Therefore it's important to consult with an estate planning attorney, to discuss your options contact the Law Office of Inna Fershteyn at (718) 333-2394.