It’s easy to be misinformed about probate and trusts. Because of false information, many families that go through probate end up dealing with a stressful process that is much longer than any of them ever considered, exposing their family’s private financial matters to the entire world to see.
Joe and Elizabeth had been married for nearly 40 years when Joe passed away. After his death, Elizabeth decided it was time to sell the home and downsize. Unfortunately, to do this Elizabeth had to go through a probate court process admitting the Last Will and Testament to the probate court, listing all of his assets and debts with the probate court, and waiting on a judge to sign off an order closing his estate This process took nearly eight months.
When Elizabeth passed away two years later, the probate process was even worse. Elizabeth had always assumed that Joe took care of everything including all these planning matters. Unfortunately, she was wrong. Elizabeth never even had a Last Will and Testament. This resulted in a long and draw out probate court process, even though Elizabeth only had a small estate. Elizabeth owned a small condo worth approximately $175,000, modest personal property totaling $7,500, a car worth $12,500 and bank account with $50,000. In total, Elizabeth had an estate totaling approximately $245,000
Elizabeth’s children ran into several problems. First, they could not access the bank account to pay for the funeral expenses. They had both been told that Elizabeth’s bank account was frozen and that they needed to go through probate court first in order to be given access to the bank account. Her children ended up paying for the funeral themselves using their credit cards and personal savings.
Next, the children faced issues while filing the initial set of documents with the probate court and having one of them appointed and confirmed as the administrator of their mother’s estate. At this point, Elizabeth’s two children hired an attorney to represent them and handle the settlement of their mother’s estate in probate court. It took Elizabeth’s first daughter Ashley, about two months to be named as administrator after her mother’s death.
Ashley had to file a detailed account of all the assets and debts of her mother that became a part of her probate estate. Ashley also had to get permission from the judge before any assets were spent out of the estate on all the bills that were due.
In addition, Ashley needed to have her attorney file a series of documents with the court to in to be able to sell the condo that her mother owned and pay off the existing mortgage on the condo.
The probate estate for her mother was finally settled 11 months after her mother’s death. During that 11-month time frame, Ashley spent $15,000 on attorney’s fees, costs, and other miscellaneous expenses on the probate estate settlement.
The $15,000 in costs was completely avoidable. If Ashley’s mother had set up her estate planning in advance, she could have avoided the entire probate court process for her children. In addition, the financial cost of setting this up would not have even been half of the $15,000 in costs that Elizabeth’s daughter incurred in settling her mother’s estate.
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