The Probate Process
What is Probate?
Probate is the formal legal process that gives recognition to a will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries. In Georgia a Will maybe probated in “Common Form” or “Solemn Form” depending on the circumstances, so it is a good idea to consult an attorney to determine whether a probate proceeding is necessary, which type of probate is appropriate whether the fiduciary must be bonded (a requirement that is often waived in the will) and what reports must be prepared. Most probate proceedings are neither expensive nor prolonged, which is contrary to the claims of many vendors selling living trust and other products.
The basic job of administration and accounting for assets must be done whether the estate is handled by an executor in probate or whether probate is avoided because all assets were transferred to a living trust during lifetime or jointly owned. Many states have simplified or streamlined their probate processes over the years. In such states, there is now less reason to use probate avoidance techniques unless there are other valid reasons to continue to minimize probate. In planning your estate, more important than minimizing probate is minimizing the real issues that can make probate difficult, such as lawsuits by heirs.
Should You Avoid Probate?
The living trust is often marketed as a vehicle that allows you to “avoid probate” upon your death. Probate is the court-supervised process of administering your estate and transferring your property at death pursuant to the terms of your will. Probate is rarely as problematic as some claim. In addition, many types of property routinely pass outside of the probate process, even without the cost of establishing a living trust. Such property includes life insurance or retirement plan proceeds, which pass to a named beneficiary by designation rather than pursuant to your will, and real estate or bank or brokerage accounts held in joint names with right of survivorship.
While it is true that the property passing under the terms of a living trust upon your death will “avoid probate,” it should be noted that there may or may not be actual value in that result. A properly drafted will in Georgia can eliminate some of the steps otherwise required in the probate proceedings. In addition, much of the delay and red tape customarily associated with probate is a result of tax laws and tax filing requirements, which cannot be eliminated through a living trust and the avoidance of probate. Finally, a living trust can almost never totally avoid probate, and a simple will is needed to “pour over” to the trust any property that has not been transferred to the trust during your lifetime.
Property that passes at death through a revocable living trust must be transferred to the trust, administered by a trustee who may or may not charge fees, and either managed for a period of time and then transferred out of the trust to the beneficiaries. There may be other costs, such as real estate transfer taxes or fees, depending upon the jurisdiction. The costs associated with these steps and the costs associated with tax filings are often ignored by living trust proponents. A comparison of the costs of probate and those of a living trust should be made on a case by case basis.
Living trusts, in fact, have great value as part of estate planning, but not necessarily to avoid probate. A living trust, if properly prepared and administered, can be a very effective tool to manage assets in the event of illness, disability or the effects of aging. In light of the aging population, the use of living trusts to minimize the risk of elder financial abuse and address similar issues, should be an important consideration in an estate plan.
For over forty years, our clients have relied on Thomas E. Raines, PC to help them make prudent business, financial, and personal decisions in in the area of Probate and Administration of Estates, please contact our Atlanta Probate Lawyer at Thomas E. Raines, PC immediately at 770-263-0093 or via the contact portion of this website.