As a Probate and Estate Planning Attorney, I counsel numerous clients and their families in their Estate Planning, namely the events that occur after someone passes away. I have found that although every client, and thus every estate plan, is unique, the initial conversation seems to always sound something like this:
Attorney: “What brings you in today?”
Client: “I am here because I would like to have a Trust written and implemented.”
Attorney: “What made you realize that you would like a trust?
Client: “I want to avoid Probate, so that the government does not take my money, nor will my assets be tied up for years after my passing.”
This recurring conversation is an example of what I have found to be true in my years as an attorney: Most of the wills, trusts, and probate assumptions believed by the majority are actually not true at all. These misconceptions of Estate Planning and Probate can be attributed to horror stories, Trust peddlers, and the good-old television. So, I have compiled a list of the most common myths, in hopes to shed a little light on the reality of Estate Planning and Probate.
- If someone dies without a will, the State gets everything
There are a multitude of reasons why everyone should have a will, but fearing that the State will swoop in and claim the Estate’s assets, is not one these reasons. In fact, for most clients, the distribution of these assets would be the same, with or without a will. If you have a will, you dictate who gets your assets. If you do not have a will, the distribution of the estate follows the laws of Decent of distribution. Under this law, your spouse or children are generally the first in line to inherit. The rules vary from State to state, so for example, in some states, a surviving spouse and children who are minors, will share the deceased parent’s assets.
The only way that the assets would end up with State is if there are no living relatives. In most instances, that is very unlikely to happen. In fact, if a family tree cannot be recreated online, there are professionals heir locators to find any and all long-lost relatives.
The Probate process is actually very simple. The Executor petitions the court to be Executor and then is appointed as the same. The court then issues a letter of office to the executor, which allows them to collect all the assets, and pay the bills of the decedent. Then the money is distributed to the heirs and the estate is closed. Simple as that.
- The Cost of Probate Will Absorb the Estate Assets
One of the first questions that I am usually asked before opening a probate is “how much will this cost?” I will tell you that there quite a few inaccurate horror stories out there about how unreasonable probate will cost someone. Fortunately, these are not true. So how much will it cost? While it depends on the estate and the Executor, most estates can be probated for between $3,000 and $5,000. Let’s break this down:
Nominal Fees including filing the estate (a few hundred in Illinois), and the publication of the estate. What remains are the attorney’s fees. This cost stays low when, for example, I take on more of a supervisory role to review the Executor’s actions and work. In other cases, the attorney plays a much more hands-on role, say, tracking down assets, paying the bills, etc. These cases are much costlier as the attorney is handling many of the executor’s duties.
Keep in mind that different attorneys charge differently. Here at Joerg H. Seifert Law Offices P.C., we charge a straight hourly rate. While some others do the same, attorneys may also charge a percentage of the estate. The latter tends to elicit a higher probate cost.
There is another unknown variable that factors into the cost of probating an estate: family. Although challenges to wills, and challenges against the representative are not common, they can significantly increase the cost of an estate.
- It Takes Years to Probate an Estate
Most estates are probated within six months to a year and can be opened very quickly. In DuPage County, I have even opened an estate in just 10 days. They do not, in fact, take years to resolve. The claim period (a time frame during which unknown creditors can make a claim on the estate), is the only period in which an estate is required to stay open. The claim period in Illinois is six months.
After the claim period, the estate can be closed as soon as the Executor or Representative has gathered all the assets, and paid all the debts and taxes. Note that most estates are not subject to an inheritance tax.
There is no reason why the majority of estates cannot be closed within a year. Occasionally, an estate may remain open because of family fights (rare), large or complex estates, or estates that have an ongoing income.
Most frequently, it is the handling of the personal property that takes the longest. Although we cherish our belongings, the reality is that they do not have much value to anyone else. When the internet first became prominent, all the personal property in an estate was easily sold. Now there is too much for sale, thus diminishing the value (economics-it’s everywhere). So, in reality, the family picks and chooses a few things to keep for themselves, maybe hosts an estate sale, contacts local charities, and then tosses the rest.
- There is no Reading of a Will
Everyone has seen the television show or the movie where the family gathers for the reading of the will of the deceased. Sometimes, there is additional drama and suspenseful music playing. “I give to my wife One Quarter of a Dollar”. The camera follows the frown of the unfortunate heir as she storms out of the room swearing his revenge.
Fortunately, the reading of the will is a creation of Hollywood. It is certainly possible that at some point this was common practice, but it does not happen these days and I do not know of any State that requires this practice. In fact, in 19 years of practice, I have never heard of a reading of a will. The reality is much simpler and less dramatic.
After someone passes and a will is found, it is filed with the County Clerk’s office and becomes a matter of public record. Thereafter, it is the executor’s job to Petition the Court to be appointed executor or representative if that is in fact necessary. (In Illinois, there is no need to probate if the deceased left assets less than $100,000 in their own name). The heirs are notified by the Executor that they are beneficiaries of the will or that they are not beneficiaries of the will. Since the will becomes public record after death, anyone can look it up.
A client that has a better understanding of the probate process will have a better estate plan. Knowing what happens after your death is important if you are going to plan for your estate. Please do not hesitate to contact Joerg H. Seifert Law Offices at Joerg@SeifertlawPC.com or 630-832-2333 for a free consultation.