Probate really is about protecting creditors.
Shannon and I do a lot of community education through workshops, seminars, and lately—webinars. We have each been an attorney for over 15 years, handling probate matters from inception all the way to the appellate level. We have seen so much in and out of the courtroom that we want to pass the knowledge about the drawbacks of probate to our community. We want our community to really understand that most people will be affected by the court process of probate, yet it is so easy to avoid. If you have minor kids, if you own a home, if you have assets over $160,000, you or your loved ones could end up in probate court. You could end up in probate unless you do something about it.
One thing I’ve realized is that it is hard to convey to people who have not experienced it, how bad probate really is. It is awful, because what probate comes down to is that it is a lawsuit you file against yourself with your own money for the benefit of your creditors. A lawsuit to protect your creditors!
Recently in court, we faced a perfect example of this. Our client is a single man. He is the only son and heir to his mother’s estate. His mother had one asset, her home. She had one credit card that was paid off monthly. He came to the harsh realization when he went to sell the house, that he would need to go through probate first because the home was not in a trust. He came to us with a friend and a plan to sell the home once he became administrator of the estate. Our client did not have enough money to handle any of the home’s expenses and the friend was going to help him and get paid back after the house sold.
So here’s the hard reality of the court system. As the only son and heir, of course the Court was going to appoint our client as administrator, but what was shocking is that the Court wanted to appoint him as administrator only if he posted a bond: $22,000 if he didn’t want authority to sell the home, and $317,000 if he did. How was this client going to be able to do that? A probate bond is to protect the estate in case the value of the estate declines as a result of the administrator’s mismanagement or misconduct so that creditors of the estate will be protected. It was unbelievable that the Court would require a mother’s only son to go through this hurdle just to ensure that the creditors (if any even existed) would be protected. Fortunately for our client, after two court hearings and argument to the Judge, we were able to get the Judge to finally waive the bond. This was a wake up call for us. We had not seen a Judge be so determined to require a bond especially in a situation where there was only one heir and no debts.
The moral of the story—get a trust. Protect your family and love ones now while you’re able to, because if your assets go through probate, the court is going to be looking out for the best interest of your creditors, not your children.
We don’t want this to happen to you! Join us November 18, 2020, 5:00 p.m. at Spaghettini for a complimentary dinner. We will be discussing how you can avoid probate. Please register here. Space is limited.