My son David (10) is at sleep away camp for the first time. He is enjoying himself and learning a lot about building relationships, woodcraft, and fishing. He is in Hendersonville, North Carolina and we just received an email that his clothes are being shipped home. He has been gone for over a month and is coming home this weekend. I did not realize how much I would miss him until he was gone. I hate waiting, but I love knowing the process and the details, it does alleviate a concern.
Communication is also important for a beneficiary of an estate. A common question that comes up in my office is ‘What is the cost of probate?’ Probate is the process of transferring your assets when you die to the next generation. In Florida, unlike most states, an attorney is required to probate your assets when you die. This highly supervised transfer takes approximately 11 months.
The Probate Process (Overview)
Three basic things take place during probate: assets are located, creditors are paid, and what’s left is distributed to beneficiaries.
Before paying creditors, they have to be found. This is done by publishing a notice to creditors in the legal newspaper and giving them 3 months to file a claim. In addition, a copy of the notice to creditors is sent to every possible person who might be a creditor. At the end of the 3 month creditor claims period, the creditors are known and paid, if all goes smoothly. If this takes longer than 3 months, then it’s usually due to a disputed claim or a problem with taxes.
Finally, after the 3 month creditor claims period expires and the creditors are paid, the remaining estate can be distributed to beneficiaries. If it takes longer, then it is usually because there is a will contest or other dispute.
The overall process takes on average 11 months. Please note that a New York, Connecticut, New Jersey, or even a Florida Will (Last Will and Testament) does not avoid probate.
The sad thing is that probate is completely avoidable. The average probate cost 3% of your assets. For example if you have $750,000 investable and it passes through probate. It would cost your heirs’ approximately $22,500! The worst part is that if the assets are invested in the stock market and it crashes your family might not be able to change the investments in time to avoid the crash!
Let’s get together and talk about some simple methods of avoiding probate.
Until next time,