Probate: The Advantages, Disadvantages, and Costs | Tax Entity, Assets, Heirs, Annuities, Cash

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"As you stand at the foot of the stairway to success, it is your choice whether you step up those stairs or stare up those steps!"
- Zig Ziglar

Probate: Advantages & Disadvantages

Advantages of Probate

Heirs and beneficiaries are protected by the court
Orderly transfer of assets in an open manner, approved by the court
Validity of title of the transferred assets is not in question
All questions and disputes of the distribution of your estate are settled under court supervision
Creditor's claims against your estate can be made for a limited time (state law dictates)
Your estate, while in probate, is a separate tax entity. Prior planning may afford some tax savings.

Disadvantages of Probate

Probate can be an extremely costly manner of transferring your assets
The process can be very time consuming
Probate court proceedings are inherently inflexible.

Probate proceedings are a matter of public record. There is no privacy when your estate goes through probate.

Probate Costs

Some estimates of the legal fees associated with the probate process in this country exceed $2 billion per year. Executor and/or Administrator fees can add almost an equal amount.

A critical issue in probate is time. The minimum time period is about 8 months…but it is not uncommon for the process to last 2 years. This is of little comfort to heirs who may be dependent upon your assets for support.

Probate can cost from 4 to 6 percent of the total estate value.

Worth Your Consideration

Avoid the probate process where possible
Place assets needed by and for the support of your loved ones (cash assets) in products that will pass the assets directly to your heirs without going through the probate process
Consider deferring income taxes along the way on your cash or cash equivalent assets. Annuities are an excellent way to protect your "Safe Money Assets".

This document is for general information only, it is not a representation of legal or tax opinion nor should it be considered legal or tax advice. For full details on this information you should contact your own legal or tax counsel.