By Tim Barkley. June 2021.
Probate. The word has achieved a Dickensian notoriety conjuring up greedy lawyers, helpless widows and children, and unscrupulous creditors. The avoidance of probate is now a cottage industry, carried on in the back offices of lawyers and financial planners.
But the problems with probate are the problems with wealth transmission, not with the process itself. Yes, probate can be trying, expensive and time-consuming. But it can also be seamless, orderly and efficient. The difference lies in the people involved and the assets administered, not the process itself.
This writer’s clients have three objections to probate, if they have any at all. First, all of your affairs become public record. The contents of your will, the list of your assets and the identity of your beneficiaries are all on file in the courthouse, for all to read. It’s all public record. That fact alone makes some of this writer’s clients want to avoid probate no matter what the cost.
Second, probate takes time. The estate has to remain open for a minimum of six months. While there is no prohibition against distribution before that time, your Personal Representative is personally liable for any debts that cannot be paid due to early distribution. For that reason, many Personal Representatives are hesitant to make distribution before all debts, taxes and liabilities are known.
Third, probate can be expensive. While the costs of probate itself – court costs, appraisal fees and accountant fees – are generally not exorbitant, the costs of hiring legal counsel to shepherd the Personal Representative through the process can be high. Sometimes that is because the process is unusually difficult; sometimes that is because the Personal Representative doesn’t know any better. Choose your attorney with care.
Probate does bring with it some benefits, often downplayed by strident “living trust” and “annuity” advocates. First, probate can shorten the “statute of limitations” for presentation of debts. A debt of or claim against you must be presented within certain time limitations in order to be enforceable. These time limits – called the “statute of limitations” – can run up to twelve years. By the filing of probate and sending notice of opening your estate to your creditors, your executor can sometimes shorten that deadline to two months from the date notice is sent.
Second, probate can provide needed supervision and protection of your estate plan if your family or creditors are likely to be contentious, overbearing, or unscrupulous. If you know that your children distrust each other – or your children hate your second spouse and your stepchildren – the Register of Wills or the court can impartially supervise administration of the estate according to the terms of your will. The fact that all dealings of the estate become public record can ameliorate the suspicion and disharmony that often accompanies estate administration. Appointing as executor a professional such as an attorney or accountant, or a trusted impartial friend, can ensure that the estate administration is likewise unbiased.
Third, a will is the only mechanism whereby you can name a guardian for your children in the State of Maryland. The appointment of the guardian named in your will be presumed to be in the best interests of your children, and anyone contesting this appointment must overcome high hurdles to defeat your selection.
There is no “one size fits all” solution to estate planning. Discuss these matters with your attorney and choose the tools best for your situation.
Attorney Tim Barkley
The Tim Barkley Law Offices
One Park Avenue
P.O. Box 1136
Wills & Trusts | Estate Planning | Probates & Estates
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