Article by John C. Lincoln

Avoiding Probate

Warning:
The following article is provided as a courtesy by its author. It is provided for informational purposes only, and should not be taken as legal advice. You SHOULD in every case act or rely only upon the advice of an attorney who practices extensively in this area of the law. You SHOULD NOT in any case act or rely upon written materials of a general nature, such as the following article.


Avoiding Probate

So you want to avoid probate because of the big expense and long delays that probate will cause when you die?

In Arizona, probate usually does not take a long time, and usually does not require a lot of expense. We can help make sure that your heirs will have as little expense and delay as possible. In many cases, that will mean preparing a revocable living trust for you. In some cases, it will mean helping you with simpler and less costly alternatives to a trust. In a few cases, it will mean allowing your estate to go to probate as the simplest and least costly alternative.

So what is probate? It is simply the process of wrapping up your affairs after you die. In very simple terms, someone must pay your funeral costs, any taxes that you may have owed, and any bills. Someone must pay the utilities and make sure that everything is insured and properly invested until the balance can be distributed. Usually, someone must liquidate everything so that distributions can be made to the heirs. AVOIDING Whoever does all of this should consult not only an attorney but also a certified public accountant, and a financial adviser. Those fees must be paid. Whoever does all of this must provide an inventory and accounting of his or her administration of your estate to your heirs. Finally, whoever has done all of this must distribute the balance of your estate according to your Will, or according to the law if you have not left a Will.

What most people do not know is that, in Arizona, the cost and delay of probate is often minor. Arizona has a modern probate code, and most probates are handled almost entirely out of court. Most probates are "Informal." That means that papers are filed initially to appoint someone as "Personal Representative" to administer your estate. However, there is no court appearance, no hearing, and no one needs to see a judge. If the papers are in order, a "Registrar" at the Clerk’s office simply rubber stamps the appointment of the Personal Representative. The Personal Representative then simply goes about wrapping up your affairs. When the Personal Representative has done all that he or she is supposed to do, the Personal Representative simply files a "Closing Statement" with the Clerk, and the probate is done.

Probate can still be expensive and involve long delays. California has laws that provide that the Personal Representative and the attorney for the Personal Representative are entitled to a percentage of the estate as their fees. That means that the fees may be very large in a large estate, even if the estate is simple. Suppose that someone dies leaving as his entire estate one million dollars in one bank account, and a sole heir. The attorney’s work necessary to administer that estate would be negligible, but the attorney’s fees would be $23,000! In Arizona, in our office, our fees to help the sole heir administer that estate would not be more than $1,500.

The difference in the cost and delay of probate in Arizona is usually not so much the size of the estate as the complexity. By the same token that a large estate can be very simple, a small estate can be very complex. Your estate may have real estate in more than one state, your heirs may be fighting among themselves, there may be questions about your mental capacity at the time you signed your Will, your Will may not be clear because you prepared it without an attorney, or there may be tax questions. These are only some of the things that may cause expense and delay. Of these, disagreement, and litigation, among your heirs, can be the most expensive and cause the most delay. Heirs fight over estates large and small. The most important thing that you can do to try to keep heirs from fighting among themselves is to have your estate plan – whether it is a Will or a Revocable Living Trust – prepared by an attorney certified as a specialist in estate and trust law.

So, should you have a trust so that your estate will not have to be probated? The answer is, it depends. We will explain, based on your own wishes, and your own family and financial situation, the pro’s and con’s of a Revocable Living Trust in your own individual case. Often, we will recommend it, and we will tell you why. Sometimes, we will suggest simpler alternatives, and we will tell you why a trust may not be cost-effective in your case. We will always advise you that you should at least have a Will.

We look forward to helping you make sure that your heirs will receive your estate with as little expense and delay as possible, and that your wishes will be carried out.

If you would like more information call us at (602) 955-9555