Probate Hell - Why You Want To Avoid It!
Probate is an unnecessary process if you plan things the right way before you die. There are many reasons to protect your loved ones from probate hell. By the way, your estate (whether it's worth $1,000 or $1 million) will go through probate if you don't structure things properly. This article tells you why you want to avoid probate.
1. Probate ties up assets.
Avoiding probate allows family members and loved ones access to cash to pay bills and distribute the assets immediately.
Probate can take months to resolve. In that time, your family members must deal with funeral expenses, property insurance, taxes and attorneys fees.
2. Judges must be involved.
During probate, court approval is required for many things, including continuing or selling a business, repairing or selling real estate, and abandoning worthless assets (i.e., timeshares with high maintenance fees).
3. It's an expensive process.
The bulk of probate expenses are attributable to the fee paid to the attorney who represents the personal representative(s) of the estate. Since Florida rules require a a probate attorney for most probate cases, attorney’s fees are usually an unavoidable part of the process.
In Florida, the attorney for a personal representative can receive “reasonable compensation payable from the estate assets.” In other words, the attorney is paid from the assets of the estate (assuming that there are sufficient assets to cover the attorney’s fees). If the fees are unreasonable, the court has the authority to reduce the attorney’s fees. The Florida probate code lists fees that are presumed to be reasonable in a given estate followed.
Value of estate up to $40,000: $1,500
$40,000 to $70,000: $2,250
$70,000 to $100,000: $3,000
$100,000 to $1 million: $3,000, plus 3% of the value over $100,000
$1 million to $3 million: $30,000, plus 2.5% of the value over $1 million
$3 million to $5 million: $50,000, plus 2% of the value above $3 million
$5 million to $10 million: $90,000, plus 1.5% on the value above $5 million
More than $10 million: $165,000, plus 1% of the value above $10 million
(Note: Homestead property is not counted toward the compensable value of the estate. The Florida probate code also provides that attorneys can be compensated for “any extraordinary service.” What constitutes an extraordinary service is case-specific, but can include will contests, audits, tax advice and returns, and dealing with real property.)
4. Probate Records are Public.
Whatever assets must be probated will be open to the public. This means that any can go to the courthouse and ask to see the entire probate file for any estate. Avoiding probate keeps family matters and financial information private.