Lions and Tigers and Probate! Oh, my!
Copyright © 2011, Douglas D. Germann, Sr., Professional Corporation.
574/291-0022, fax 574/291-0024, PO Box 2796, South Bend, IN 46680-2796
Wikipedia, at the time I am writing this, says that a bugaboo is an “amorphous imaginary being used by adults to frighten children into behaving.” Change from “adults” to “those who stand to gain” and from “children” to “those whose pocketbooks they want” and you have a good understanding of the way the word Probate is used today.
Trust mill promoters have been beating the bushes around Indiana in seminars and mailings and face to face sales calls, making Probate the modern day Bugaboo.
Their solution is however ill conceived. They try to turn the wonderful Trust, the whole garden method, into a dump-cake substitute for a Will. Here is a 20- or 40-page document used to do what a 3-page Will could do! Who pays for all this overkill? You. Is it a savings for your family? In some cases it might be; in others it could create such a mess that it will cost you now more than your family could possibly save after you die.
Probate just is: it is neither good nor bad in itself. It is a tool. You would not say that a hammer or a screwdriver is bad and should never be used. You could sort of use a hammer with a screw, but a screwdriver will not do for a nail.
Probate shares the same root as Probe and Prove. What it means is that someone is checking to see that what you said you wanted done is being done. That could be a good thing.
The problem is that in some areas of the country probate has been overdone or even abused. California, Cook County Illinois, St. Louis are some areas where folks consider avoiding probate to be a very good thing. But around St. Joseph County, Indiana, I have not seen the abuse or excess costs as prevalent. Actually around here, probate is pretty speedy and economical.
So where does probate shine?
Clearing title to real estate: When someone dies and their name is still in the chain of title, we need to clean up that title. In probate we can get a Judge’s order that clearly and quickly determines just who owns what.
Ending the wrangling: If the kids are not getting along, if one child is lording it over the others, there needs to be finality. If you put the strong-willed one in as Trustee, it is difficult for the weaker ones to get their voices heard. However, an Executor of a Will can be kept in line just by knowing that the Judge can be called in on a few day’s notice.
Delaying the cost and hassles: If you set up a trust, the usual way of “avoiding probate,” you pay now the expense of setting up the trust (usually at least as expensive as probate), plus you have the hassle of getting all the deeds, car titles, and accounts changed (ever tried to deal with a stock transfer agent?). If you miss something, probate might still be required, and you have doubled up on expenses. You pay out of your pocket now, what your kids would pay out of their inheritance years from now. So a trust, misused as the trust salespeople do, is often not probate avoidance but “probate acceleration.”
Three modern options for giving your legacy: read more.