Did You Know? Your Will is a One-Way Ticket to Probate Court
One of the biggest shocks people learn about Wills is that Wills are administered through the probate process, a legal proceeding overseen by a judge or magistrate. Think about a movie where a character passes away and the family goes to the attorney's office to read the Will aloud, and then the attorney starts pulling out all the assets and giving them to the respective beneficiaries. That's not real life! If you rely on a Will to transfer your assets to family at your death, you have created a one-way ticket into the probate court for a judge to officiate the terms of your Will.
The requirement of Wills going through probate might come as a surprise because this important of the estate planning puzzle is rarely discussed. And from the attorney's perspective, why should it be? After all, you went to the attorney and wanted a Will, the attorney prepared it, and you executed it--similar to the way you order food from a fast-food drive-through and it's ready at the window. Understand that probate is big business for a law firm. Most counties follow a fee schedule for attorney's fees, and such fees must be approved by the judge. And you guessed it--those schedules were written by attorneys.
When this conversation comes up in meetings, our prospective client often asks why this was never discussed by the attorney who drafted the Will. Typically, the reason is because the client never asked. And for attorneys who primarily practice in the probate court, they know the goal is to get the first crack at administering the estate, because that's where the big paydays come from.
Typical conversation with a prospective client:
Me: What are you looking to accomplish with your estate plan? Prospect: We don't want to leave a mess. We want the process to go as smoothly as possible and avoid making our one child go through court. We want it to be easy! Me: Well, you are aware the Will you executed several years ago is going to go through probate court because that's how a Will is administered, right? Prospect: I thought we were avoiding probate with our Will! The attorney never mentioned that! Me: Ok. Well did the attorney mention there are ways you can avoid probate? Prospect: If you mean a Trust, then yes, that was mentioned. But we're simple folks and we don't have a huge estate, and the attorney said we don't need one! Me: There are ways of avoiding probate without a Trust. In fact, most people need Trusts for reasons other than avoiding probate, but that's a different conversation. Prospect: That was never shared with us. Me: The attorney mentioned the cost of your plan though, right? Prospect: Of course, it was only $100! We got quite a deal because we've gone to church with our attorney for many years. Me: That's how much the Will document costs. I'm referring to the actual cost of administering that Will. Prospect: We didn't think there would be any other costs. Those weren't mentioned. How are those calculated? Me: A lot of counties follow a fee schedule to approve attorneys' fees. The AARP estimated between 5% and 10% of a probate estate goes to cover administration expenses, a lot of which would go to the attorney. Prospect: **Visibly frustrated** That's way more expensive that the initial fee we paid. And none of this was discussed with us. Me: You never would have known about that fee, because it wouldn't get paid until after you passed away. And your kids never would have known other options could have been available to you.
By the way, that AARP study was done in the 1990s. But you'll hear a lot of arguments that those estimates are too high. And most of those arguing that point maintain the bulk of their legal practices in probate law! On average, are things more expensive today than in the 90s?
You should know what you are getting into when you create an estate plan. If something isn't explained to you clearly enough to your liking, consider the reason.
At Snyder Elder Law & Estate Planning, LLC, we are happy to offer a complimentary consultation to discuss the goals that YOU want to accomplish and fully answer the questions that are most important to YOU.