Myths and Misconceptions About Estates and Probate—How to Avoid Probate for Everyone (22)

How to Avoid Probate for Everyone: Protecting Your Estate for Your Loved Ones
Myths and Misconceptions About Estates and Probate—How to Avoid Probate for Everyone (22)
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1/10/2024
Updated:
1/10/2024

1. “A power of attorney can be used to take care of a person’s affairs at their death.”

False. A power of attorney is a document that you sign that gives another person the right to act for you in some or all transactions. If you are dead you do not have the power to do anything, so that means neither does the person to whom you gave the power. The power of attorney dies with you.

2. “Reading of the will. A will has to be read to heirs like on television.”

False. While all heirs at law and those who are mentioned in the will have to be given a copy of it, there is no requirement of a formal reading where everyone gathers in a room and listens to the lawyer read it aloud. A mailed copy is the usual procedure. As to trusts, unless local law specifies otherwise only those mentioned in the trust need be notified, and even then they are only entitled to see the parts of the trust specific to them.

3. “You can disinherit your spouse and/or children or leave them a pittance.”

Partly true. Children can be disinherited provided that you clearly say, in writing, that you are intentionally leaving them nothing. Otherwise there is a legal presumption that your children, as your natural objects of affection, would not have been disinherited unless you mistakenly left them out. This is important since there are cases of, for example, a father’s children born out of wedlock or from previous marriages. As to a spouse, if you are in a community property state, you cannot disinherit him or her without their written consent. In other states you can’t do it through a will, but can sometimes put all assets in your individual trust and leave nothing to the spouse. Check with a good estate planning attorney to see the rules where you live.

4. “Court costs are what makes probate expensive.”

True and false. Court costs—that is, money paid directly to the court—can be sizeable but are not usually the biggest expense. Courts charge filing fees, guardian ad litem fees, inventory fees on the value of the probated estate, bond fees, and sometimes state inheritance tax. The biggest cost by far is the attorney fee. A more detailed description of attorney fees is referenced in other parts of this book. Suffice it to say here that attorney and executor fees can be many thousands of dollars—money that is paid by the heirs, money they wouldn’t have had to pay if they had avoided probate.

5. “If you have a will you don’t need to go through probate.”

False but sometimes true. Wills are just written instructions to the probate court as to who gets what when you die and who is in charge of making that happen. If there are very limited assets, then a probate small estate procedure can be used, avoiding full probate. However, unless your estate qualifies for these procedures, a probate court must oversee the administration of the will in order to legally pass the estate assets to your heirs. This can be very expensive as well as time-consuming. In most cases, your heirs will not receive their share until the probate process is over and all debts and expenses are paid. A will does not usually avoid probate.

6. “The state gets everything if you die without a will.”

False.The state gets a share if you go through probate whether you have a will or not, but the only time the state gets everything is if the person dying has no known or locatable heirs, or in the event of abandoned property whose ownership cannot be ascertained, in which case it would escheat to the state.

7. “The oldest child gets first shot at being executor.”

False, unless the oldest child happens to be the one named in a will. In a will situation, the named executor (a.k.a. personal representative) is the one with preference. That person can decline, in which case a second named choice, if any, is the one. If no named person is willing to act as such, then the court will name a public administrator to handle the probate (at attorney fee rates, of course). If there is no will, then the heirs can agree on who will be the executor; lacking agreement, the court will do it. In a trust there is a named trustee as well as a second choice. If properly written, a trust will have a method for choosing a new trustee if the named one refuse to act, dies, or is incompetent. There is no preference given to the eldest child unless you are talking about ascension to the throne.

8. “A handwritten will is not legal.”

False. All states recognize a handwritten will, which in most cases does not have to comply with statutory signing and witnessing requirements. This is called a holographic will and should be entirely in the handwriting of the deceased except in limited cases. It is also going to be probated if there are probatable assets.

9. “If you have a trust then there is no need for probate.”

Usually true but not always. Sometimes we want to have a small probate to take advantage of a short statute of limitations on a notice to creditors for creditor claims. So, we might leave some things out of the trust intentionally to take advantage of this statute. However, in many states trusts can now advertise for creditors to appear and also get this short statute of limitations.

10. “Wills can be changed by crossing things off and writing things in by hand so long as you initial the changes in the margin.”

False. I know people do this and think it is legal, but it is not. You should not take out your will or trust, cross something out or write something in, and initial the change. Doing this could invalidate the document altogether, or at best the handwritten and redacted areas will be ignored. There are specific signing formalities that are required under the laws for legal documents and amendments to those documents, which could include notarizations and a specific number of witnesses.

11. “When my parents die, I have the right to inherit even if they had remarried.”

False. Except for the rules of intestacy (described in chapter 1), if your parent has remarried and owned everything jointly with the new spouse, at her death you are not entitled to inherit anything—unless of course your parent and the new spouse provided for you specifically in a trust or beneficiary arrangement. Even at the death of your parent’s new spouse, you still inherit nothing except as provided by them.

12. “My brother borrowed money from my mom who is now dead. Doesn’t he have to pay it back to the estate?”

It depends. Often the borrower claims the money was a gift and that they still get an equal share of the estate. Unless Mom covered this situation in her estate planning, a question of her intent may have to be decided in court. At the very least, it is likely to create a family rift. We usually suggest language in a trust that says the money should be considered an advance on the borrower’s expected inheritance to be deducted from his share.

This excerpt is taken from “How to Avoid Probate for Everyone: Protecting Your Estate for Your Loved Ones” by Ronald Farrington Sharp. To read other articles of this book, click here. To buy this book, click here.

The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.

Ronald Farrington Sharp, Esquire, has practiced family and estate law since 1975 after attending the University of Michigan and Wayne State University Law Schools. He has personally prepared over three thousand trusts. An award-winning mystery writer and sculptor.
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