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Avoiding Probate

Many people want to avoid probate for the following reasons --

• It is expensive.
• It takes time.
• It is public. An estimate of the value of your assets is filed and an inventory of property may be filed
• It provides a forum for creditors to get paid.
• It allows a spouse to claim a statutory share of the estate.

On the other hand --

• It is often just as or more expensive to arrange your affairs to avoid probate and it often does not work. Also many of the expensive things which must be done after death must be done whether or not there is probate.
• Probate allows creditor claims to be barred. If proper notice is given claims are barred unless they are filed within a certain time. Creditors can also attack arrangements meant to avoid probate if they were also meant to avoid creditors.

Whether or not it is desirable to avoid probate is something which must be determined in each individual case. Many people believe that avoidance of probate avoids estate taxes. That is not so and should not be a consideration.

How can you avoid probate? By not having any assets which require a will or the law to say who gets them when you die. If they pass to someone named in some document other than a will or the statutes you avoid probate. Among devices which will do this are --

• Trusts
• Joint Tenancies
• Beneficiary designations
• Pay on death accounts.

In smaller estates use of the last three items is often very effective. But if any substantial amount of assets exist in your sole name without any beneficiary designation there will still be probate. If you are going to avoid probate you must make these arrangements for all your property. You must also arrange to have all property you acquire in the future subject to such arrangements. The same can be said of living trusts which are a very popular way of avoiding probate. There will still be probate if only some of your assets are transferred to the trust. All your property must be transferred to the trust to avoid probate. Just signing the trust document is not enough.

Donald M. Thompson * 55 W. Monroe #3950; Chicago, IL 60603
Ph: 312-782-0844 * Fax: 312-201-1436 * Email: donthompsonlaw@sbcglobal.net