Probate myths and facts are important to know, should you ever come into contact with the situation. It can be sticky, but it helps to be educated on the topic. We hope that this blog post helps you better understand various probate myths and facts.
Myth: Probate costs and attorney fees are usually as high as 10 percent of your estate.
Fact: Arizona court costs to open a probate are very modest. In addition, Arizona lawyers may charge only reasonable fees for necessary services, not percentage fees. Fees may increase in the event of tax issues, disputed creditor claims or other litigation, but these same issues can arise with a trust.
Myth: In probate, assets are not distributed for several years.
Fact: An informal probate procedure can start as early as five days after death, and distribution can occur as soon as it is clear there are sufficient assets to pay expenses, creditors and taxes. Creditors have up to four months to submit claims, and the personal representative may, but need not, delay distribution until the end of the creditors’ claim period. A trustee may also have to delay distribution to pay taxes or divide property. An improperly prepared or funded trust may require money and time to correct before distribution can be carried out.
Myth: Probate forces the liquidation of your assets.
Fact: Liquidating assets is necessary only to pay expenses, creditors or taxes, or to make distributions to beneficiaries. A trust is not a guarantee against such liquidation for the same purposes.
Myth: Probate litigation is more expensive than trust litigation.
Fact: Unhappy family members or beneficiaries can challenge both wills and trusts. A trust is not a guarantee against litigation. Expenses will depend on the nature of the litigation.
Myth: A trust will avoid federal estate taxes.
Fact: A will or trust that provides for a “credit shelter trust” arrangement can reduce estate taxes for married couples who have combined assets over the federal estate-tax exemption. A trust in and of itself does not reduce estate taxes at an individual’s death, nor does a will.
Myth: Probate proceedings are complex and require special court approval.
Fact: In Arizona, most estates use informal probate procedures that do not require formal court approval. In many cases, personal appearance in court is not required.
Source: State Bar of Arizona
Connie Cone Sexton
October 12, 2012
The Arizona Republic
Read more: http://www.azcentral.com/news/azliving/articles/2012/10/12/20121012boomer-probate-myths-facts.html?nclick_check=1#ixzz2A3PRSoQb