When you die, your estate will most likely have to go through a legal process known as probate. You may already have heard that avoiding probate is a good thing; however, a better understanding of what the probate process is may help you understand why you should avoid it.
After you die, your executor or personal representative must inventory all of your estate assets. A value must be assigned to each asset as well. Next, any claims against the estate must be reviewed and paid if the claim is valid. If someone challenges your Last Will and Testament, that must be defended. Eventually, your estate assets will be transferred to the intended beneficiaries. All of this occurs during the probate process. For a relatively small, uncomplicated estate, the probate process usually takes a few months. For a larger, more complicated estate, it can drag on for a year or more. Bear in mind that estate assets are usually tied up by the court during this entire process.
Along with the time that probate takes, it also costs money. Everyone involved, from your executor to the estate planning attorney to the appraisers must be paid for their services. All of these fees are paid out of your estate assets, diminishing the value of your estate.
With some careful estate planning, you can drastically decrease your estate’s exposure to the probate process, thereby freeing up assets for your loved ones and ensuring that estate assets are not drained before they can be passed on to beneficiaries.