Probabte Court: Friend or Enemy?

Probate Court: Friend or Enemy?

What is Probate Court, the Pros & Cons, and how to Avoid It 

When someone passes away, their estate—property, assets, and debts—must be sorted out. Enter probate court, the legal process that oversees this transition. This is what most people think about when they hear "probate court," but did you know, there's more to it than that?

When an individual becomes incapacitated and he or she is unable to make his or her own decisions or voice his or her wishes and desires, who steps in? In an ideal world, everyone would have advance directives for this very reason. Advance directives detail your wishes and allows you to appoint a person of your choosing to make those decisions. When advance directives do not exist, the probate court is often petitioned to assign someone to make these decisions.  

But is probate court your ally in these scenarios or a red-tape nightmare? The answer isn’t always simple.

 

 What is Probate Court?

Probate Court is a specialized court that deals with the legal process of managing a person’s estate after they pass away. This includes validating wills, appointing executors or administrators, paying off debts, and distributing assets to beneficiaries. In addition to estate matters, probate court also handles petitions for guardianship and conservatorship—both for minors and adults who can no longer manage their own affairs. 

 

When Probate Court is Your Friend

 Probate court can be beneficial in several scenarios:

• There's no Advance Directives-If an individual did not establish advance directives (Power of Attorney, Healthcare Proxy, Living Will) the court has the ability to appoint someone to serve as a guardian or conservator to handle the individual's current affairs. This ensures that an individual who is incapacitated is provided with fair and appropriate treatment. 

• There's No Will-If someone dies without a will, probate court provides a legal framework to distribute assets according to state laws. This helps prevent family disputes and ensures fairness.

• The Will is Contested-Disagreements among heirs over the will’s validity? Probate court can resolve these issues transparently, with legal oversight and due process.

• Large or Complex Estates-Estates with diverse assets—businesses, multiple properties, or significant debts—may benefit from court supervision to ensure everything is accounted for properly.

• Protection for Creditors and Beneficiaries -Probate creates a public record, notifying creditors and ensuring debts are paid before heirs receive their share. It also holds executors accountable for honest administration.

 

When Probate Court is Your Enemy

While sometimes helpful, probate court can also be time-consuming, costly, and invasive.

• It's Expensive-Attorney fees, court costs, and executor fees can consume a sizable chunk of the estate. In some states, probate costs can reach 3-7% of the estate's value.

• It's Slow-Probate can take months—or even years—before heirs receive anything. Simple estates might clear quicker, but complications often arise. Don't be surprised if a case is ongoing for 2 years or loner. 
  

• It's Public-All probate filings are public records. Anyone can see what assets were owned, who inherited what, and how much. The names of beneficiaries are a matter of public record. This lack of privacy can attract unwanted attention. 

• It's Stressful-Grieving families may find the formal court process emotionally draining. Disputes can escalate, dragging out proceedings and straining relationships. Probate court may even delay distributions to pay fees associated with the estate. If family members or beneficiaries cannot pay the bond required by probate court, the estate is placed with a court appointed conservator.

• Is your best interest at heart? We all want to think and hope that if matters are taken to probate court, the best interest of the client will be implemented. However, if someone is appointed guardian, conservator, or executor of the estate, there's no guarantee that this person will act in the best interest of the one they representative. The Court appointed guardian/conservator/executor will make decisions and spend the funds as they deem necessary, makes all decisions regarding the care of the incapacitated person, and distributes remaining assets accordingly.

 

How Probate Court can be Avoided

In many cases, people structure their estates specifically to avoid probate.

• Have Clear Advance Directives-This includes a durable power of attorney and healthcare proxy to avoid court appointed guardianship and conservatorship.

• Revocable Living Trusts-Transfer assets into a trust during your lifetime so they pass directly to your beneficiaries without court involvement.

• Joint Ownership-Property held as joint tenants with right of survivorship passes to the surviving owner.

• Beneficiary Designations-For things like life insurance, retirement accounts, and even some bank accounts, name your beneficiaries directly to bypass probate court. 

• Small Estate Affidavits-Some states allow heirs to claim small estates through simplified processes, avoiding probate entirely. 

• Payable-on-Death (POD) & Transfer-on-Death (TOD) Accounts-Designate someone to receive the funds or assets immediately upon your death.

 

Case Example:

 Mr. John Doe is a 79 year old male who was diagnosed with Dementia. He never created advance directives and he is now no longer able to manage his own affairs due to his confusion. Mr. Doe's daughter is unable to access his bank account, speak with Alabama power about his bills, and cannot speak with her dad's doctor about his care. She must petition the court to be appointed as the guardian and conservator in order to access Mr. Doe's affairs and provide him with care. This entire process could take months, in which time Mr. Doe's health deteriorates. If the probate court does not feel like Mr. Doe's daughter (who is 60 years old herself) is an appropriate person to handle her father's affairs, the probate court could appoint a third-party individual who is a complete stranger to Mr. Doe and his family. In these situations, requests for services or needs must be made to the appointed individual for approval. Often court appointed representatives are lawyers and attorneys who are not easily accessible and responses to requests may be delayed. 

 In Summary 

Probate court is neither inherently good nor bad. It’s a tool—sometimes necessary, sometimes avoidable. The key is planning. When planning ahead, the development of advance directives and straightforward estates can allow the family to avoid probate court. However, when there's no advance directive, no last will and testament, or potential conflict, probate court may be the only option. Talking with an estate planning attorney to understand what’s right for your situation can be an invaluable resource. A little planning now can save your loved ones time, money, and heartache later.

How can Alabama Ægis help you and your loved ones? We can foster and facilitate these difficult conversations about planning ahead. Discussing advance directives and wills can be a dreaded and scary conversation to have. Let us help make the conversation easier. While we aren't lawyers or attorneys, we can help you understand the language of these documents and advise on what documents may be needed in your situation. We can then refer you to a legal representative to have these forms developed. 

Remember, communication will avoid disputes and legal challenges to your wants or your family's intentions. Your life doesn't have to look like the movie scene-the one where loved one's are gathered in an attorney's office waiting to learn who inherited, or didn't, from mom and dad. Let's make your life's wishes known now.  

 

Don’t wait until a crisis occurs—start planning today to protect yourself and your loved ones. Visit the Alabama Ægis website to learn more about how we can help.