Last Updated on October 26, 2022 by Estate Planning FAQ
When asking a number of practitioners, the quick response typically received is no. There are no benefits of going through probate. However, this article will attempt to provide an understanding of what the benefit potentially could be.
Introduction
As a cursory matter, the author believes that if probate can be avoided, in most instances it should. It is a time intensive process and an expensive process. As set forth in other articles, each jurisdiction is different and has their own requirements of the process of going through probate. In Kansas, for example, the process takes at least four months, typically six months. However even having an estate completed in a six-month time frame is rare. The costs incurred to probate an estate is far in excess of what a Last Will and Testament would cost to prepare, even though this also has to go through probate. Even a Revocable Trust is must cheaper than the costs associated with probate, including even the probate of a Will.
With this said, depending on the particularities of the estate, including possibly family dynamics, it may make sense to force of the estate through probate.
Benefit #1 – Supervision
The first benefit of going through the probate process to distribute the assets of the decedent is supervision. As has been discussed in previous articles, the probate process is overseen by the court. Depending on the jurisdiction, this could include such oversight as monitoring every aspect of the estate including granting permission to sell personal property, the method to be used to sell the personal property, the amounts which it will need to be sold for, Etc. Typically, this is also used when addressing the needs of selling real estate in the estate as well. The court would have complete oversight of this. In those family dynamics where the executor may not be trusted, having this court oversight would be beneficial and that way, actions taken by the executor or administrator are only carried out after the court has approved the same.
Benefit #2 – Creditors Time Period
A second instance when using probate would be beneficial would be a situation in which the decedent had a large number of creditors. Just as with the supervision as mentioned above, if the decedent died owing a lot of money, using the probate process could put some finality on creditors’ claims. For example, in Kansas an unsecured creditor, if they wish to be paid, must either start a probate proceeding within six months of the date of death of the decedent or alternatively must file a claim in the estate of the decedent after or within a particular period of time.
If a probate administration has been initiated, the time begins to run in which the Creditor must take action. So the action of the administrator to start the administration will result in the creditor to start to take action or their claim will not be enforceable.
Benefit #3 – Cost versus Trust Expense
The third reason it may be beneficial to go through the probate process is the cost associated with the same in relationship to the value of the estate. Currently it is less expensive to have a revocable trust prepared than it is to go through the probate process. For the most part this is correct. However, at times the language placed within a revocable trust could require administration that could exceed the cost of going through probate and having the matter completed. Although this is not typically the case, there are instances in which an estate can be administered less costly than through use of a trust. If the situation provides for this, it should be considered.
Benefit #4 – Reduce Risk of Error
A fourth reason to where use of probate is beneficial is the reduced risk of errors. This factor falls in line with benefit number one where the court administers and supervises the entire process. There may be times that the court would be requested to interpret and apply certain provisions of a will or application of the law to a particular situation. For example, if the will provided for certain actions to be taken and the estate and it’s executor could interpret that two different ways given the situation. By going through probate and requesting the court to make that interpretation and ruling reduces the risk of errors that the executor may make.
Benefit #5 – Confirm No Other Wills
Another reason for the advantages of going through probate would be an instant, although rare, whereby there are multiple Wills. Perhaps the decedent had written a will and did not destroy the old will they had. Questions as to which will controls, the use of the probate process could assist with this. Furthermore, using Kansas as the example, if there is another Will that someone wishes to have probated, there is a window of 6 months whereby all Wills have to be submitted to probate and the Court can make the determination as to which Will controls.
Benefit #6 – Insolvency of Estate – Manner of Payment and Distribution
The final reason where it may be beneficial to go through the probate process is where the estate is insolvent. If the estate does not contain sufficient assets to pay all of the creditors, it may be beneficial to begin the probate process and request assistance from the court to determine the manner and priority of creditors claims. It also allows the executor to seek guidance on the order in which what few assets there are should be liquidated. Most jurisdictions have a priority as to how creditors claims are to be paid. For example, in Kansas there are four classes of claims ranging from the final funeral bills and expenses of last illness to general unsecured creditors. Only after one particular classification has been satisfied can the creditors in the class below receive any payment.
Conclusion
In general, it is still sound advice and the general rule should be that probate should be avoided. However, as with other articles in this blog, each situation depends on a number of factors. It is the author’s strong recommendation that the reader consult with counsel in their jurisdictions to determine whether forcing a matter through probate makes sense in any particular situation.