How To Avoid Costly Probate Mistakes
Video Transcript
Ray Hrdlicka – Host – Attorneys.Media
Well, you’ve mentioned probate two or three times now.
So that word has a kind of a negative connotation in the general public.
And then you mentioned about the State making the decisions for you.
So tell us a little bit about why that’s a really bad thing.
Okay.
Andrew Dósa – Estate Planning Attorney – Tacoma WA and Oakland, CA
Well, the first thing is I can’t really say that probate is a really bad thing. I could just simply say it’s not the best thing.
Okay.
And there may be a good reason to have probate. But then I’ve said this before, probate is not the end of the world. But if you’re in probate, you think you can see the end of the world.
All right. What is probate?
Probate is a court proceeding where the judge is overseeing what happens. You have to jump through hoops. You have to file… You have to have the formal pleadings that are done properly, or the court will kick it back and make you fix it.
And then once you get that done, the court oversees it and the court will confirm who has authority to do things. The court will approve of distributions. And at the end, the court has to make sure that everything is done properly.
Well, there are three things or four that come along with probate.
One, there’s a huge amount of time that’s involved in doing it realistically. Nine months is about as fast as you could open and close a probate.
And in California, it’s probably longer. I’ll say in California, it might take you four or five months to get your first hearing before there’s a court approval of someone formally having power to do things. Everything gets stuck in the middle and nothing gets done. No one has power to pay bills because the money’s all locked up.
And I just had a case where I had to file a petition to preserve, to protect about $2,000,000 in liquid assets because the banks would not recognize me as the trustee, even though the trust said I was the trustee.
So one, you have a court overseeing it.
Two, you’ve got a whole lot more time involved in completing it.
Three, it’s a lot more cumbersome of a process.
Four, you’re almost certainly going to want to have an attorney because it’s a particular practice and there are just all sorts of rules and regulations. An attorney who knows what he or she is doing can help you.
And then five, after you get through the expense—the fourth—after you get through the expense of the attorney and the administrator both getting paid according to a fee schedule set by statute, then you have no more privacy. So if you don’t want the world to know what your assets are and how they’re managed and what you’ve done, then you want to avoid probate.
So those five downsides to probate make an estate plan a so much more attractive option for people.
Ray Hrdlicka – Host – Attorneys.Media
Well, that last point, number five, in terms of privacy, that should have everybody running to estate planning attorneys.
Andrew Dósa – Estate Planning Attorney – Tacoma WA and Oakland, CA
Yeah, I think you can’t understate the losses and the negatives of a probate.
I can’t say this: If there is a fight among relatives or there’s a dispute over the trust, you may not have a choice about having the court involved, but your chances of avoiding a trust are so dramatically improved if you have an estate plan that’s in place with a will or a trust that’s done properly and really airtight.
Law Offices of Andrew Dosa – Estate Planning Attorney
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