Legal Notes
Is probate good or bad?
by Margaret Phelan
Attorney at Law
Often it is said that a lawyer’s favorite answer to a question is, “Well, it depends…” That statement is certainly correct in answering the question: Is probate good or bad?
First, let’s review what probate is. After someone has passed away, they can no longer take care of their legal affairs. And, any appointment of an agent under a power of attorney ceases at death. If no contractual arrangements, such as trust ownership or death beneficiary designations, have been made, then probate may be necessary.
Whether the estate is subject to Washington’s nonintervention procedures or can proceed on a small estate affidavit basis, depends on the estate. If there is more than $100,000 of assets subject to probate, then proceedings must be initiated through the Superior Court.
If assets subject to probate are less than $100,000, then a small estate affidavit can be used.
Probate starts with a petition to the Superior Court following notice to appropriate persons. The court determines the appropriateness of notice, admits any will and decides whether or not bond is required. Once an oath and bond, if required, are filed with the court, the clerk’s office issues “letters” authorizing the personal representative to proceed.
The process then involves garnering assets, handling creditors claims and taxes, preparing an inventory, paying bills, liquidating assets as appropriate and determining beneficiaries and/or heirs. As part of the process, various notices may be required and an inventory and an accounting are prepared.
When all tasks are completed the probate is closed and assets are distributed. Probate proceedings typically last five to eight months with some being completed in a week and some lasting as long as several years. The length of time, costs and expenses depend upon the decedent’s estate and issues needing resolution.
Probate can be a way to establish a testamentary special needs trust that can protect entitlement benefits for a disabled heir or nursing home spouse. Probate is generally required to establish this type of trust due to Medicaid requirements in the Social Security Act. Probate can also provide structure or supervision of a personal representative, giving heirs a sense of comfort. Probate also provides a forum for resolution of disputes and can provide structure to resolve creditors claims.
The disadvantages of probate are typically the fact of court supervision, the costs related to providing the structure of supervision and the costs of dispute resolution. In addition, there can be additional costs and attorney’s fees.
Whether or not probate is good or bad depends on the issues in a decedent’s estate and the status of the beneficiaries.
One example of where probate is good is when the decedent’s estate is limited and the spouse resides in a nursing home or long term care facility. Limited assets may be used for the special needs of the spouse rather than being expended on long-term care costs if the decedent had a will with testamentary special needs provisions.
Another example of when probate is good is when the decedent had no pre-mortem planning and died with creditors claims or potential claims. These can be resolved through probate. Or, probate can be helpful when a decedent’s heirs are unknown or uncertain as they had no close family members. The probate process can publish notices and allow entry of orders determining heirs.
Whether an estate should be subject to probate or not depends on its makeup, goals, needs of beneficiaries and whether or not planning is appropriate before death to avoid the process. Seeking the guidance of an attorney well versed in estate planning and the administration of decedent’s estates can help determine whether it is good or bad in an individual’s circumstances.
Margaret Madison Phelan practices elder law in Vancouver, Washington. Her practice focuses on estate planning, paying for long term care, probate, guardianship and the special needs of retirees and persons with disabilities. For further information, call 360-696-2069.
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