Why is probate so expensive?

probate lawyer broken arrowWhy is probate so expensive? And, what can a person do to avoid a probate action in the first place? This is a common question that we receive in our law office.

To answer this question we must first start with: what is the probate process? A probate action in the District Court is required when a deceased individual passes away leaving behind a simple Last Will and Testament, or for some individuals, passing away with no Will left behind at all.  The purpose of the probate is to take the decedent’s name off the title to certain assets (typically real estate holdings) and place them in the name of the beneficiary to a Will, or for no Will was left behind, to place it it into the name of the decedent’s next of kin.

But to get that done:  even a simple probate here in Oklahoma can take six to eight months to complete, some times much longer. And along the way a multitude of legal documents have to be filed with the Court – not the least of which are: an Order Appointing a Personal Representative, Letters Testamentary, Notice to Creditors, a General Inventory and Appraisement, an Interim and Final Accounting, an Order of Final Distribution, and the list from there goes on.

The real answer as to why probate’s are costly are usually a culmination of one or more of the following variables:

A. An heir to the Estate files a Will Contest contesting what he or she is to receive under Decedent’s Last Will and Testament. This unfortunately is become more and more common. These contested estates as they are called can and usually are expensive to resolve.

B. Decedent left behind a large bill that went underpaid. Could be an outstanding medical bill, hospital invoice, tax liability, credit card debt, or some such other such indebtedness. The creditor involved sues the probate Estate and once again the cost of litigation climbs.

C. Where real estate holdings are sold within the framework of a probate action: costs can escalate. That’s because those real estate holdings have to be typically appraised, an Application to Approve Sale of the Real Estate entered by the Court, a notice of sale ensues, followed by the sale itself together with a confirmation of that sale. As can be seen this involves numerous moving parts including pleadings and publications in the legal news. All this adds to cost.

D. A Last Will and Testament is improperly drafted that does not meet the requirements for a Will here in Oklahoma. The probate Judge refuses to admit the Will into probate and the estate proceeds as an intestate heir estate. Invariably this leads to more cost, more time to complete the probate.

E. A Last Will and Testament is prepared with language in it that is ambiguous and/or one that contains conflicting clauses. The ambiguity in the Will (especially clauses dealing with who inherits what items of decedent’s estate) can and are often litigated. Once again, more attorney fees and court costs.

These are just a few of the ways a probate action can become expensive for all concerned.  And these are by no means the only contributors to cost, but at a minimum, are the ones we typically see.

So having so all of that: How do we avoid probate in the first instance? Call me and let’s discuss your options. But at a very minimum the following techniques are used by estate planners to avoid probate altogether, or, at the very least, reduce challenges and/or contests. They include:

A. Drafting and funding a Revocable Living Trust (an R.L.T.). This is by far the most popular approach that people take.

B. ensuring that retirement accounts, insurance policies and annuities have up to date beneficiaries attached to them. Such beneficiaries typically take the asset outside of probate.

C. placing decedent’s assets in some form of survivorship – either through a Joint Tenancy Deed, a Transfer on Death Deed, a Payable on Death provision on a bank account,  or some other probate avoidance instrument.

Call our office and let’s discuss your options. You get peace of mind knowing that your Estate will and can pass to your loved ones without undue delay and without the high cost of probate.

 

 

 

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