A Will does not avoid probate. I cannot count how many times I have corrected people who thought this. A Will gives you control over who gets your assets and who is in charge, but it doesn’t avoid court involvement. I should really start with telling you what probate actually is, since many know to avoid it, but few can really define it.
Probate is a court process by which the estate of a deceased person (the decedent) is administered so that creditors can be paid, and property can be transferred to whomever will receive it. It’s not really to benefit those who inherit; it’s actually for the benefit of the decedent’s creditors. With a Will or without one, if an individual dies owning any asset in his or her name, without a living named beneficiary or without a right of survivorship co-owner, that property must pass through the probate system in order to eventually end up in someone else’s name. The status of the decedent’s debt situation at his or her death Will determine whether all the assets will go to the creditors or whether assets Will be available to distribute. Depending on where the decedent lived at his or her death, the process can take from 4 months to more than a year. It can also be costly. The attorney will get paid to handle the court process and the personal representative (also known as an executor or administrator) can also get paid. I practice in Florida where both the personal representative and the attorney can take 3% of the inventory value.That’s 6% off the top!
If you have a Will and no one contests its validity, then it can be a little easier because there is guidance as to who inherits and who serves as personal representative. We call that dying “testate”. If you die without a Will, we call it dying “intestate”. It gets a little trickier when there is no Will because we don’t know who the decedent wanted to serve as personal representative, and we don’t know who he or she wanted to inherit the assets. The personal representative part is not such a big deal because any family member or friend can come forward and petition the court and, as long as they get the written consent of anyone else with priority, then they should be able to be appointed, that is, if they have never been convicted of a felony and if they would otherwise qualify in that state. For instance: in Florida, only a relative or a Florida resident can serve. You can’t have a friend who lives in another state be your personal representative. If you name your friend in your Will, he or she will not qualify upon your death, so it’s like not naming anyone at all. In any case, ultimately someone will get appointed and will administer the estate.
Once that person is determined, you have to let the court know who the closest family members are, i.e., the surviving spouse, children, parents, siblings, etc. The applicable state statute in your state will determine who inherits. It may not be who you would have chosen, but since you did not make a Will, the court is not going to consider your opinion. Let’s take the single person as an example. Imagine that there is a single man (“Single Man”) who has been in a committed relationship with a woman for 5 years. They are practically married, but never made it official. The man’s parents died a few years ago and he has no children. He just has a brother that he hasn’t seen in 10 years because the guy is a jerk and they never got along. However, Single Guy didn’t make a Will. We can only guess that he would have wanted his significant other to benefit at least partially from his estate and maybe his friends or some charities. I would guess that the last person whom he would want to inherit his hard-earned money was his brother. Guess what? That’s what happens. Under any state statute, the brother is going to inherit in the absence of a Will stating otherwise.
So, what’s the moral of the story? Get educated. Maybe with another family, the brother inheriting would have been a fine result, but maybe not. I always encourage people to get the facts and then make an informed decision. If you would be satisfied with the results of not doing planning, then don’t bother, but if you won’t like the results, then you need to do something about it.