Our last article explained the different stages of the lengthy probate process. After reading that article, you may be thinking, “I don’t want my family to have to go through that when I die.” And the good news is that you can avoid putting your family through probate with proper estate planning. To learn more, send us an email or call our office (405) 607-7799 to schedule a 15-minute discovery call.
In this article, we will explain why you should avoid probate, and then how to actually accomplish that end. First, let’s discuss why you should prioritize avoiding probate through estate planning.
Why should you avoid the probate process? Why do astute individuals take the time and effort to plan their estate, to avoid this thing called probate?
Put another way, when you die, do you want to force your family to get a judge’s permission to get access to their inheritance? Do you want to incentivize family fighting in court? Do you want to invite creditors to step right up and make a claim, leaving only your spouse or children to fight with creditors about whether the debt is valid or previously paid?
No one reads any of the above descriptions of the probate process and thinks, “yeah, I’d love to put my family members through that when I die.”
The good news is that all of the headache of probate, all of the conflict, all of the interference by judges and lawyers can be completely avoided with simple estate planning.
But I’m not talking about just having a few forms, like a Will or Power of Attorney.
To keep your family out of court, and out of conflict, and to maximize the value of your estate and keep it out of reach of creditors and tax collectors, you need a proper estate plan from an attorney willing to take the time to understand you, your estate, and your family.
Why you should avoid probate in Oklahoma
There are many reasons to avoid probate. Privacy, legal expenses, the possibility of family conflict are among them.
If you haven’t read our previous article, you may not fully understand what the probate process is exactly. Here is a quick recap:
“Probate is a lawsuit you file against yourself after you die with your own money, for the benefit of your creditors.”
Probate is a lawsuit that your family must file to change title of your assets from your name to their name. Any asset that was titled in your name must go through probate court before your heirs can inherit it. This is true whether you had a will or did not have a will. If you have a will, the probate judge will distribute your assets according to your will. If you die without a will, the judge will distribute your assets according to the state’s default plan.
There is no privacy in probate. Your entire estate and net worth will be published in court filings.
One reason for avoiding probate is to protect your privacy, and the privacy of your loved ones. Here is an example. The probate process involves publicly disclosing the assets of your entire estate to the court. It’s called filing of the inventory, and it is a necessary legal requirement before the estate can be distributed. That means that all of your bank accounts will be publicly disclosed, as well as the name of the individuals inheriting those bank accounts. Prior to final distribution, notice of this will be published in the newspaper.
Do you want the entire world to know the names of your loved ones and the amounts of money they are inheriting?
Another reason to avoid probate is to avoid the ability of your family members to fight. The probate process is basically for the purpose of allowing family members to file claims against each other. The system is set up so the court must allow family members to challenge everything at every stage of the process. This includes nomination of the executor of the estate, to the payment of creditor claims, to the final distribution.
Each of these stages is published in the newspaper, as well, and court hearings are held before moving on to the next stage.
Probate is long, time consuming, and expensive.
This entire process consumes time, both that of your heirs and their lawyers. Even the most efficient probate proceedings still have fixed costs: filing fees, newspaper publication fees, court costs, and lawyer fees to get through each of these stages. There’s a minimal set of legal obligations that you can’t get around, that must be done.
So who pays for these costs? You do.
All of these costs will eventually be paid by you, through the liquidation of your estate. And all of the above-mentioned expenses will exceed the cost of setting up an estate plan that avoids probate.
Will my family have to go to court after I die?
While you find yourself pondering, “will my family have to go to court?” you are not the only one. Make no doubt about it that your family will be asking the same question after your death.
“My father died, he left behind some land. Do I have to go to court to get access to it?”
“My parents died, I know they had stocks, but I’m not sure how to find out. Do I have to go to court?”
When a client – usually a family member of the deceased – comes to us with a Will, the first question to ask is, “Do I have to go to court?” The answer will depend on whether the deceased left behind probate assets, or non-probate assets.
A probate asset is a piece of property that requires court administration to change title. Examples would be real estate not held in joint tenancy, as well as vehicles, and other property contained in the will.
But some assets do not require probate in order to be legally transferred to the heir or beneficiary. Examples of non-probate assets would be:
- Real Estate held in Joint Tenancy
- Payable On Death designated accounts
- Life Insurance proceeds
In each of these situations, the beneficiary is immediately entitled to the property upon death of the decedent (the family member who co-owned the real estate in joint-tenancy; or held the POD accounts; or purchased the life insurance policy). Once deceased, those accounts flow directly to the beneficiary and no probate or court order is necessary.
Often, a decedent will leave a combination of assets. Some assets can be distributed without a court order, and other assets will be distributed through the Probate process in court.
However, your heirs will not know until they consult with a probate lawyer.
Can you avoid probate in Oklahoma?
The answer is yes you have the power to ensure your family inherits your estate without having to go to court. But avoiding the court process requires a more thorough estate plan than a simple will.
As you saw in the above examples, there are ways to title assets (joint tenancy, payable on death designations, etc) that avoid probate altogether. But not all assets can be disposed of in this manner. And there are reasons why you would want to use a different strategy to avoid probate than what the joint tenancy or POD beneficiary designations provide.
For example, a trust can not only avoid probate, it can avoid some of the downfalls of joint tenancy or payable on death designations.
How complex must your estate plan be? It will depend on the size and complexity of your estate. But even a complex estate plan will be less expensive than a complicated probate. And a simple estate may only need a few simple tweaks to avoid probate.
How will you know what is right for your estate? By attending one of our Family Wealth Planning sessions. This will be an educational consultation where you will become more aware and in tune with your financial situation than ever before. The sessions last 1.5 to 2 hours and clients leave feeling empowered. You will design a plan during the session, and I will allow you to confront uncertainties that may exist in your estate or current estate plan. But I only hold a limited number of these sessions per month.
If you want to learn more about my Family Wealth Planning sessions, schedule a 15-minute discovery call. On that phone call you will be able to decide whether to book a full length session.
I’ve explained how many estate plans do actually work as intended. We are not a document mill, and we do not sell estate planning documents. To the contrary, I am an estate planning attorney, and I execute plans that work when your family needs them. During our Family Wealth Planning session, you will see and understand the difference.
In my next article, I explain how we avoid putting families through probate court in Oklahoma with our Life and Legacy Estate Plans.