You often hear that you should ‘avoid probate’ when doing estate planning, but do you know why you would want property to avoid the probate process? Why does estate planning often involve avoiding probate?
Probate takes place in Oregon’s Probate Court, and involves court filing fees, legal notices that must be published and other necessary expenses. Usually, a probate attorney is needed to help with the legal filings and appearances that are involved in the process.
Court proceedings generate public records. With Probate Court proceedings those public records can include financial data from the estate as well as the distribution of assets. Many families prefer to keep this information private, and using a trust to transfer assets can keep valuable property from becoming part of a public record.
Probate is a slow and time-consuming process. It’s a procedure run by the court system, and if everything goes smoothly, it can be completed in ‘only’ 6-9 months, but with the challenges of complex estates, the process may take over a year. During this time, assets are in limbo and the estate’s assets, such as bank accounts, may be unavailable. A life insurance policy or retirement account, both of which avoid the probate process, can transfer cash to a beneficiary to provide for immediate financial needs while probate takes place.
When assets, particularly stocks, are caught in the probate process, the time involved can result in a financial loss. When an executor (personal representative) is unable to sell items such as stocks with decreasing value, or real-estate that is depreciating, it may result in a loss for the estate.
Administering an estate is a stressful process, as is grieving – combine the two and you have a major reason people would want to speed up the settlement of an estate.
While avoiding probate is one goal of estate planning, lessening the burden of one’s passing on loved ones is another. Using various estate planning tools such as trusts, can help create a smooth, less cumbersome transition of assets to heirs and beneficiaries.
ABOUT THE AUTHOR: Richard Schneider
Experienced estate planning attorneys Portland OR of the Law Offices of Richard B. Schneider LLC offers estate planning and business planning resources to residents of Portland OR.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.