For many of us, the thought of leaving property after we die isn’t a question of why. It’s a question of how.
Drafting a will can seem like a simple process. It’s simply a question of designating your property to named beneficiaries; and in the case of minors, naming an executor or guardian who will competently manage the property until they turn 18. There’s just one problem. And it’s one you can’t afford to ignore—probate.
Probate isn’t just a time consuming process which can take years to resolve. It can also be an emotionally taxing one; one which can stir up bitterness, jealousy and anger.
It can be expensive, as well. While the cost of filing probate in Utah is relatively minor, attorney fees are not. And while Utah law forbids attorneys from charging percentage fees based on the assets in your property, hourly costs for a probate attorney in Utah can reach up to $300 per hour. And if probate winds up lasting for months on end, you may find those fees can sometimes exceed the actual value of your assets. Physical property, in some circumstances.
Luckily, probate isn’t always necessary when establishing a will. In fact, you can avoid probate altogether. If you’re concerned about what happens to your property after you die and are considering a will, here’s what you need to know about how to avoid probate.
What Is Probate?
At its most basic definition, probate simply refers to the official process of how your estate is identified, managed and distributed by an administrator as a result of a court order. It typically is initiated when the court receives a petition to open the probate of an estate or admit a will. Without an administrator (also known as an executor or personal representative) designated by the terms of your will, one will be appointed by the court to itemize and calculate the value of your assets and oversee any debts, taxes or bills owed. After all property has been accounted for and any outstanding debts paid, a probate court will order distribution of any remaining assets among your heirs.
What Are The Benefits Of Probate?
The chief benefit of probate is to officially validate your will (including naming legal guardianship of any child under the age of 18) and to ensure beneficiaries receive proceeds from your designated property without facing the threat of creditors or liens as a result of any outstanding debts.
Is Probate Required If I Have A Will?
Not necessarily. But unless the terms of your will indicate your assets are not specifically allocated to avoid probate, your heirs will not be able to claim legal ownership of property—which can be one of the most time consuming and costly reasons why most people prefer to avoid the process altogether.
How Can I Avoid Probate?
Retirement accounts and life insurance policies are only entered into probate court on suspicion of fraud. So long as you’ve designated beneficiaries in your will, they’re the legal property of your stated heirs and are not subject to creditors.
In Utah, there’s a particular clause you can use to avoid probate if your property falls under $100,000. It’s called a small estate affidavit. It grants the right for a named executor to collect and distribute your estate if at least 30 days have passed since the death. However, it cannot be used to claim physical property, such as your home; nor can it be used to transfer any titles.
Luckily, Utah also has another clause which can automatically transfer physical property to an heir known as a joint tenancy. In a joint tenancy, a surviving spouse automatically becomes the owner of any physical property through a legally established right of survivorship—without the need for a court order. Keep in mind that joint tenancy can only apply to married couples, and must be designated and notarized on both your property title as well as your will.
One final method you may want to consider to avoid probate is to establish a revocable living trust in lieu of a will. Revocable living trusts can be significantly more complicated than a will and most people would be well advised to seek legal help when drafting one. It doesn’t prevent taxes upon your property (and neither can a will, for that matter.) But it can permit you to avoid probate altogether and still have the peace of mind knowing your heirs are legally entitled to your estate.
Can My Home Be Sold In Probate?
Legally, yes. Particularly if there’s an outstanding debt or mortgage owed. Real estate is considered the main asset for most estates, and probate courts will frequently insist on its sale by an executor to pay any valid claims against it.
If a home isn’t sold during probate, an executor could potentially distribute it to your beneficiaries subject to court approval. Probate home sales are fairly common, however, and can frequently delay court hearings as a result.
One alternative is to sell your home prior to drafting a will, with the proceeds being used in place of physical property. Even though this can prove just as difficult as selling your home in normal circumstances, Gary Buys Houses offers you a unique solution called our “Sell Now, Move Later” program. We’ll buy your home as is, without the need of a realtor or attorney. You can continue to live in your house even after the sale, and can even arrange for you to purchase your property back after any outstanding debts which could force probate disputes are paid.
Is A Will Right For My Estate?
The final say is definitely up to your and/or your spouse/partner. If your non physical assets fall below the $100,000 threshold mentioned previously, you may want to take advantage of a small estate affidavit. And so long as both you and a spouse can agree to joint tenancy, it can certainly protect your home from being entered into probate.
But while a will might be flexible enough to be altered when circumstances permit (something that alternatives such as an irrevocable living trust can’t afford you), it’s not fail proof. It doesn’t insure against creditors, taxes or legal disputes. It can offer you peace of mind, however—and ultimately, both your heirs and yourself may find that to be more valuable than any property you leave behind.