The other day, my 6-year-old son asked me, "Mommy, when you and Daddy die, who's going to get your silver candlesticks?" How's that for an ice-breaker! Let's face it: Talking about our estate plans is usually not very high up there on our list of Most Enjoyable Activities. At times, the whole subject can also seem as mysterious as the IRS. Unlike filing taxes, though, it is possible to get super creative with your estate plan.
One of the bigger mysteries, to many people, is why it seems that the process of offering a will to a judge for approval, called probate, can sometimes become highly complex -- and by "complex", I mean lengthy and expensive.
Actually, there is really one rationale behind all court probate proceedings, and if you know what it is, you will be in a better position to evaluate whether it makes sense to have your entire estate pass through a will, or to consider possible probate alternatives. (Note that there may be other reasons to avoid probate, as well, such as an anticipated will contest or the estate tax. This post is intended to shed some light on court proceedings.)
Essentially, the rule that guides procedures in probate court is this: The court wants to protect the interests of those who are vulnerable. The legal terms here for "vulnerable" are "under disability" and "unknown."
Now, these might not be the people you would consider to be "vulnerable." Unfortunately, though, it's not up for discussion; the law lists the types of people who fall into this category.
People "under disability" are:
(1) Minors; and
(2) Anyone of majority who has been determined by a court to be in need of a guardian or who is otherwise mentally incapacitated.
"Unknown" means:
(3) Anyone whose whereabouts are unknown, or whose very existence is uncertain.
The final category is:
(4) Anyone excluded from the will, but who bears a closer degree of familial relationship than people who were included.
You see, it's all about fair play. Because, when your estate is being probated, you won't be there to say to the judge, "Your Honor, I really did want my estate to be divided in this fashion, and I was fully of sound mind and under no undue influence or duress when I executed my will. Don't worry, Your Honor, none of my named beneficiaries are trying to disinherit anyone who isn't here to defend their own interests."
So in lieu of your personal appeal to the judge, the Court will go to great lengths to protect the interests of those who it considers vulnerable.
Here are some common ways that a seemingly straight-forward will can become a complicated probate, due to the existence of people who fall into any of the above four categories:
Example 1. You name a minor as a beneficiary under your will. Minors can't manage their own money; nor can they legally object to an estate proceeding. A guardian will need to be appointed to represent the minor's interests as well as to manage the asset given to the minor until the minor reaches majority. (And simply omitting the minor child from your will but including older children, or more distant blood relatives or non-relatives, won't solve the problem, either, as explained in Example 4, below.)
Example 2. You have a disabled adult son who has a guardian, and you're afraid that a bequest from your estate will interfere with his Medicaid eligibility, so you leave this son out of your will. In fact, you set up a separate trust just for him, but leave him out of your will. This is a sound plan, from a Medicaid benefits perspective. Yet, the court will demand lots and LOTS of proof that it was your actual intent to leave your son out of your will.
Example 3. You have an adult daughter who suffered from depression and turned up missing... 15 years ago. If you leave her out of your will, the Court will likely want a lot more than a police report proving that diligent efforts were made to locate your daughter (so that she can be notified of the proceedings).
Example 4. Your closest family members are second cousins, twice removed who live in other countries and with whom you haven't spoken since you were 6. If you leave your entire estate to your long-time BFF, again, the court will want proof that it was your actual intent to leave out your blood relatives in favor of a mere friend. (Or, as noted in Example 1, you leave out a minor child but name older children, or more distant blood relatives, as beneficiaries. Then a guardian will be appointed to represent the interests of the minor child.)
The length and expense of these probates can generally be avoided, or at least minimized, with a well-drafted living trust or other probate alternative. However, trusts can be cumbersome and they often have a higher up-front cost, so it's really a matter of weighing the pros and cons. An experienced attorney should be able to help you sort it all out.
And in case anyone was wondering... I told my son that the candlesticks are not worth nearly as much as he thinks they are. But the real answer to his question? My will leaves that up to the discretion of my estate's executor.
Disclaimer: I hope that you find the information in the above post informative. However, because the information is general in nature, it should not be relied upon as legal advice for your particular situation. Furthermore, it is not my intent to create an attorney-client relationship via this blog post.