Probate, the legal process of administering a deceased person’s estate, often carries with it many misconceptions. These myths can lead to confusion for individuals during this process.
Part of preventing this issue includes debunking four prevalent myths about probate.
1. The process is swift and simple
Contrary to popular belief, probate is not a quick and straightforward process. While some estates may move swiftly through the probate system, others can become entangled in lengthy proceedings.
In America, people in the 50th percentile of wealth had $140,800 worth of assets per household in 2020. Factors such as the size of the estate and the complexity of assets can significantly extend the probate timeline. Understanding the potential for delays can help individuals better prepare for the intricacies of the probate process.
2. It is only for the wealthy
Another common misconception is that probate only applies to the wealthy. In reality, probate is not exclusive to large estates.
Even individuals with modest assets may find their estates subject to probate. People need to settle debts, distribute assets and resolve legal matters. Consequently, anyone with assets, regardless of the amount, may have their estate go through probate.
3. You lose everything to creditors
The fear of losing everything to creditors is a prevailing myth surrounding probate. While the probate process involves settling debts and distributing assets, it does not necessarily result in the complete depletion of the estate.
Probate laws prioritize the payment of outstanding debts, but remaining assets are typically distributed among heirs according to the deceased’s wishes. Understanding the nuances of probate laws can help reduce concerns about losing all assets to creditors.
4. It is inevitable
Strategic estate planning can minimize the impact of probate on an individual’s assets. Tools such as living trusts, joint ownership and beneficiary designations offer alternatives that may bypass the probate process.
Dispelling these common myths about probate is important for individuals to approach the process with a clear mind. Acknowledging the potential complexities can help people engage in proactive estate planning to reduce the challenges associated with probate.