Planning for death is like any other transition of life, except this is one we can make easier for our loved ones. Don’t let the process of settling your estate, a process commonly known as probate, get in their way — and cost them more money.
After you die, your will must be legitimized by the court, in this case the local probate court. The judge (there is no jury) needs to know this document is the last will of the deceased, review the inventory of the estate and confirm who will administer the estate proceeds. This is called “executing” a will. Typically the executor or a lawyer representing the executor files the appropriate forms and handles the court matters.
A will is not legal until it is probated, a process that typically takes anywhere from 6 months to 3 years. This also allows an heir to challenge a current will, the probate court to confirm there are no errors in the documentation and creditors to make a claim against the estate. The fees to file the paperwork range from $150 in Michigan to as much as $800 in Texas, but of course legal fees are on top of that.
All your assets must be accounted for — not just your house, car and bank accounts but also your savings bonds, those stock certificates in a drawer and the 529 plans you set up for your grandchildren’s education, as well as personal property.
Here are 3 mistakes people make. Avoid them and you can lower the cost of probate:
1. Having no will. Or having one written in another state
A stunning 60% of adults in the U.S. have no will or estate plan.
Have a current will. Many folks say they did a will 20 years ago. Life changes. You need a will for the state you live in now. There is a definition of residency that is a bit different for each state but includes where you live, register your car and vote in elections. An out-of-state will slows the probate process because it does not meet state requirements. It may even be declared invalid.
If there is no will, the person is said to have died “intestate.” The estate still has to go through probate court and an inventory documented. An administrator — a lawyer or family member — will be appointed by the court to distribute assets according to state law. This is a lengthy and often costly process.
If an heir successfully contests a will or the court finds the will did not align with state statutes, the deceased is also considered to have died intestate.
source: market watch
