A well thought-out family wealth plan can minimize the amount of time spent in probate court. Probate courts oversee how a deceased party’s assets are accounted for and divided. Addressing potential probate issues with all members of your family can reduce the burden that can ultimately be placed on any member of your family. Here are four reasons families should try to avoid probate as much as possible:
1. Cost to the Estate.
When someone passes away, the property remaining in their name is considered part of their estate. The average cost to probate an estate in Ohio is 5% of the value of the estate. In Ohio, probate courts establish fees not only for attorneys handling probate matters, but also filing costs and fees for the executor of the estate. These costs vary due to the size of the estate and one can minimize costs by reducing the estate size prior to death.
2. Out of Pocket Costs for Family Members.
Oftentimes, to avoid creditors from attempting to repossess or foreclose on property owned by the decedent, family members may have to front the costs of household expenses while the probate process is going on. This can become an expensive and unexpected endeavor; particularly if there are no liquid assets that have avoided probate such as insurance policies with family members named as beneficiaries.
3. Probate Records Are Available to Anyone
Probate records are public and many courts in Ohio have records available via online search. This means there is little privacy when it comes to a family's assets. Sometimes, probate is contested and disputes between family members may also become public knowledge. If you are concerned for your family’s privacy, establishing a family wealth plan that address potential probate issues should be in order.
4. Probate can be a lengthy process.
Administering an estate takes time. This is particularly true if you have illiquid assets or assets that need to be sold to free up cash. Even if your family does not dispute your family wealth plan, creditors may appear to recover funds that they feel they are entitled to receive. An estate tied up in probate not only frustrates the heirs, but also can cause stress on the executor if they are a family member with no experience at the process.