There are a number of efforts underway in several states to help people avoid probate, according a recent article in The PV Democrat, “Avoiding probate - panacea or problem.” This is especially true in progressive states like California.
We’ve all read articles that discuss the role of trusts in estate planning that frequently advise you to make every effort to avoid probate. But this isn’t always the right answer.
Probate is a court process that’s designed to protect your intentions for the distribution of your assets after death. It gives finality to creditor claims against the estate and authorizes the probate court to insure compliance with a decedent’s wishes. It requires that an individual’s financial assets be defined, insures that they’ll be given to the proper persons and provides a procedure for protecting the distribution that was planned by the decedent.
There are some risks in using a trust rather than going through probate. They include these items:
Legal Contests. When someone is left out of a trust, or if the trust assets are improperly restricted in their use, then he or she can initiate a contest. Undue influence is frequently alleged when a trust is created just before death.
Probate Protections. A will requires two or more witnesses, written testimony of the witnesses, and must be notarized in some states. However, a trust can be created with just a signature and even implied in some instances with no written document. Therefore, it may be easier to create an improper trust than an improper will.
The Potential for Mistake and Misuse. If the document is a trust, a transfer on death account (TOD), a joint ownership, or a simple deed, it is easier to have an elderly loved one sign a single document like a trust instead of trying to have him or her pass the scrutiny of two witnesses and a notary, as required for a will.
Estate planning strategies need to be properly created well in advance of death by an experienced estate planning attorney at Cottrell & Jacobs. This helps to avoid an estate battle and a splintered family.
Reference: (Pauls Valley OK) PV Democrat ((September 27, 2017) “Avoiding probate - panacea or problem”