PROBATE: A PROCESS, NOT A PROBLEM


Fred and Sam were neighbors who coincidentally died on the same day.  Fred had lived with his wife of thirty-eight years, owned their house, and had three grown children.  He had a middle-class income; at the time of his death he had a net worth of $500,000.  Sam, on the other hand, had been divorced twice, was on his third marriage, had six children from the first two, loved to gamble, and with his equally middle-class income was worth only around $150,000.  Fred had never thought very highly of Sam.  After all, Fred was the one with the stable job and marriage, and he had been frugal with his money.

            As the two deceased souls looked down from heaven on what they’d left behind, Fred said, “You know, Sam, now our heirs have to go through that horrible nightmare of sorting through our mess.  Probate.  What a huge problem for everyone.” 

            Sam raised his eyebrows, “Why, what’s your worry?  You’re the one who had the same wife for decades, three smart kids, the same job forever… your probate shouldn’t be a problem.”

            “Yeah?  Well, I didn’t leave a will.  I never got around to making one.”

            Sam was aghast.  “Fred!  That’s… that’s astonishing!  Of all the people I knew, I figured you would have the wherewithal to make a will before you died.”

            “Why, did you?”

            “Of course!  You think I’m crazy?  I have two ex-wives, one current wife, and six kids who all hate me.  A will was not only necessary, it was the only thing that was going to keep my heirs from going to war with each other!”

            Fred looked down to earth and saw that his wife was arguing with the probate lawyer.  “It seems my wife is having a bit of trouble.  What’s wrong?”

            Sam replied, “The probate process is going to be more difficult for her because you didn’t leave a will.  You see, you have to think of probate as just that—a process—and not a problem.  Well, it’s not a problem if you tackle the situation early, like I did.”

            “So what happens in this so-called process?” Fred asked. 

            “You really are clueless, aren’t you?  Man, I’m surprised.  You were always the level-headed one on the block.  Anyway, the process mainly accomplishes two goals:  paying off your debts and transferring assets to your heirs.  Your personal representative—designated by you in your, ahem, will, oversees the process.  In your case, the probate court will determine who will be your personal representative.”

            “Oh, geez.  Then what?”

            “Next, some state laws require that the personal rep publishes death notices in the paper, informing everyone of your death.  This gives your creditors time to file claims against your estate.”

            “Oh, great.”

            “Then your personal rep inventories your estate.  Mind you, not everything has to go through probate.  Joint property owned by you and your spouse, life insurance that goes to a beneficiary, and other stuff—depending on your state—is free from probate.  It’s good to have a living trust.  Converting your bank accounts and retirement accounts to ‘payable on death’ accounts is a smart idea.  Giving away property before you die—as gifts—lessens the probate costs.  Oh, and you know that it costs your estate money to go through the process?”

            “Unfortunately, yes.”

            “The next thing that happens is that the estate assets going through probate are distributed.  The administration costs are paid first, followed by family allowances, funeral expenses, and then taxes and debts.  After that, all remaining claims are settled.”

            “Gee, in my case, nothing will be left for Margie or the kids.”

            “You don’t know that.  As long as none of your heirs contest the will—oh, I forgot, you don’t have a will—well, if you did have one and nobody contested it, the process would go fairly smoothly.  Every state has its own laws, so you always need to consult a professional.  But you know something, Fred?”

            “What?”

            “The only time you can consult a professional is while you’re still alive.”

            “What about you, Sam?  You’re the one with the complicated life.”

            “All taken care of.  I made a will, a living trust, and gave every one of my kids cash gifts—even though they hate me.”

            Fred made a sour face.  “I never did like you, Sam.”

Sam smiled smugly.  “That’s okay, Fred.  At the end of the day, so to speak, we’re all equal.”

 Written by: Martiess Bott of Bott & Associates, Ltd.

More Articles and Information on Probate:

www.dummies.com/…/probing-probate-what-you-should-know.html

http://law.freeadvice.com/estate_planning/probate/

http://www.nolo.com/legal-encyclopedia/article-30235.html

Advertisements

About Brandon M. Lewin

Marketing and training run through my blood. That is why I love what I do. Being an intricate piece in the marketing success of Cardinal Path Training Academy has been a dream. Its imperative for us to share our knowledge with a community of people and organizations who desperately need guidance in the fields of digital intelligence and marketing. The future depends on it. I also get the chance to teach people with hands-on, real world experience workshops. That is so much fun to infotain. Beyond my passion for my work, my family is my everything. Chicago sports is a close third.
This entry was posted in Businesses, Guest Blogger. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s