Estate planning can be confusing - in fact, it can be down right daunting, if you don’t know the ins and outs and have reliable information. It seems a lot of the misinformation stems around Wills and probate. We’re setting out to clear up some of that confusion today.
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So, read on for the top five myths about how Wills and probate law actually works.
Myth #2: If a Will Isn’t Filed, the Deceased’s Assets Are Fair Game
Myth #3: Executors Cannot be Beneficiaries of The Deceased’s Will
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Myth #1: A Will ALWAYS Has to Go Through Probate
No, not all Wills go through probate. While it’s true that most do, when it comes to Wills and probate, there are some exceptions as to what has to go through the courts. For example, if you have a small estate, jointly held assets or if you have property held in an Irrevocable Trust, you may not have to go through probate. Keep in mind that probate laws vary by state.
When a Will goes through probate, the courts ensure the distribution of your assets goes as you instructed. If you die without a Will or other estate planning documents in place (known as dying intestate), your estate will go through probate. Other reasons for probate could include if a beneficiary refuses an inheritance or cannot be found, or if the Will hasn't been updated in some time and a beneficiary predeceases the person who wrote the Will.
A Will may not have to go through probate if you go through proper estate planning and take specific, strategic steps to avoid it. This can save time and frustration, as well as costly legal fees associated with the probate process. If privacy is of concern, setting up the necessary Trusts or other tools to distribute your estate after you pass away confidentially is always an option.
Want more information on when a Will goes through probate? Check out our article, Do All Wills Go Through Probate?
Myth #2: If a Will Isn’t Filed, the Deceased’s Assets Are Fair Game
Simply put, no, an unfiled Will simply holds up the process of settling the estate. But what happens if a Will is not filed? It's important to understand the relationship between Wills and probate courts. Without filing the Will, it's difficult, if not impossible, to sell an inherited home or register vehicles still in the deceased's name.
Several unpleasant consequences can follow when an Executor fails to file the Will so they can formally begin the probate process. First, the assets cannot transfer to heirs, and the estate will likely continue to incur expenses such as insurance premiums and property taxes. Additionally, creditors can pursue payment on debts. Finally, the Executor can also face criminal prosecution for failing to file a Will for personal gain.
Myth #3: Executors Cannot be Beneficiaries of The Deceased’s Will
Actually, it's quite common for someone to name a loved one as both a beneficiary and an Executor. For example, you may name your living spouse as the Executor if you pass away before them. Or, you may prefer to assign an attorney to act as Executor. This strategy can make it easier to get through the process of filing the Will in probate court.
What happens if a Will is not filed? It can delay the settlement of the estate. It's also important to note that some beneficiaries do not qualify as Executors. This includes:
Beneficiaries under the age of 18
Non-relatives living outside the state
Those with a past felony conviction
Any of the above could disqualify someone, including a beneficiary, from acting as an Executor.
Myth #4: The Will Must Be Executed Immediately
Not true. The specific time frame varies according to state laws affecting Wills and probates. However, the Executor generally must file the will in probate court within five years of the deceased's death.
How long is a Will valid after death? Wills do not expire. When you cover all of the legal requirements in your state, it's executed. That means your Will remains valid unless and until you revoke or replace it.
Myth #5: The Deceased’s Debts Die With Them
Unfortunately, this is also false. When you leave behind unpaid debts, the Executor settles them from funds available in your estate. After subtracting funeral expenses, debts and taxes, the rest of the assets then become free for distribution to your beneficiaries.
Conversely, if your estate has insufficient assets to pay off debts and final expenses, it's considered insolvent. Typically, debtors receive partial payment based on priorities determined by the courts. How long can an estate stay in probate? It may take months or years to settle debts and other affairs, which means that an estate can remain tied up for a long time.
Update Your Will Today!
Now you know the cold hard facts about some of the major questions and myths surrounding Wills and probate law. Assigning a trusted Executor to carry out your wishes can help prevent your estate from getting caught up in probate court any longer than necessary. Settling your debts is an important part of the estate planning process - preparing for that with solid, effective estate planning is key. Otherwise, your estate could end up with little leftover to distribute to your beneficiaries.
Trust & Will’s online estate planning services make preparing and executing your Will and other estate planning documents simple, safe and affordable. Learn more about how to start or update your Will today - because this is not something you want to put off another day.
Nobody wants to think about death and dying...but preparing for the inevitable can offer some sense of control. Knowing that you’ve protected your loved ones (not to mention your legacy) is worth every ounce of effort it takes!
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