How Does The Probate System Work?
The probate system works inefficiently and it is beginning to reach a place of overwhelm, which is predominantly due to 12,000 people per day turning 65 and in our state of California, 1,000 people per day turn 65, which is 7,000 people a week turning 65 years old. The courts are getting overwhelmed so they tend to work inefficiently in most cases, and we find that people get backed up in terms of being able to even get a hearing. We just filed for a smaller hearing, called a 850 petition, which is a smaller version of probate but we were unable to get on the calendar in Los Angeles until May of 2016.
Would Probate Still Be Needed If There Was Already A Will In Place?
Yes, absolutely. Probate comes from the Latin word that means needing to validate and substantiate whether or not the will is valid. People would end up in the probate system whether or not they had a will. 55 percent of Americans are asking this question and the same 55 percent do absolutely nothing and do not get the question answered regarding whether or not they need a document in place to avoid probate.
Do All Of A Deceased Person’s Property And Assets Have To Go Through Probate?
No, some assets that are by right of contract, or operation of law as we refer to them, would go directly to named beneficiaries. These usually involve certain assets like life insurance, annuities, certain pension plans, and anything where there was a contractual relationship with the financial institution to deliver money directly to a beneficiary to avoid probate. Similarly, it could also bypass probate when real estate is held as joint tenancy, meaning more than one person is titled on the property with a right of survivorship.
How Is It Handled When Someone Passes Away With Property In Several States?
It would just be a nightmare scenario if the person passed away with property in several states. We took care of a situation back in 2006 where a man had several properties in eight states and despite my warning he failed to get his plan done. In consequence to that, when he passed away and did not have all of those properties taken care of and put in a living trust, his family members had to go out to all seven of the other states and open up probates there.
Once all seven of the probates were closed in the other states, they were able to bring all those back and open probate here in California since the deceased was a resident of California, which is why this was the final destination where the final probate had to occur. They had a go out and complete the seven of them, bring them all back here, have that reviewed by the court and then close everything out. It took 2 or 3 years and it was done at a great cost. It can be very difficult to go into another state and then have to hire a local probate attorney.
Would Someone Actually Have To Hire Separate Attorney In Each State?
Exactly. If the person had properties in eight different states, they would have to hire eight different attorneys to handle each probate in each jurisdiction. Either that or the person would have to get on a plane and fly to each one of those places themselves at great cost of time, expense, and delay, but either way they would be putting in a lot of money and throwing a lot of money at it.
What Are Some Common Misconceptions About The Probate Process?
The largest misconception is that if the person had a will, they would be able to avoid probate, whereas having a will would mean the parties would directly end up in probate to have it validated and verified.
Another misconception is that a joint tenancy of property would be secure enough to avoid probate, whereas we have had several situations where both spouses were killed in an auto accident simultaneously thereby placing that piece of real estate into the probate system.
One of the other misconceptions is that sometimes using some of the other tools and relying on them as a Swiss army knife for estate planning purposes is not the end-all in terms of estate planning.
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