Most discussions about estate planning involve probate avoidance. Most folks are familiar with the myth that “avoidance of probate” should be the number one estate planning goal. But is it so terrible that your assets have to go through probate? These are the reasons why the probate process may be helpful in some cases:
- Probate is often associated with taxes. However, for 2020, the estate and gift tax exemption is $11.58 million for an individual, or $23.16 million for a couple. This means that you can leave up to these amounts to your heirs and pay no federal or gift tax.
- The cost of probate may be less than the cost of setting up a trust; a trust requires additional work and maintenance.
- Probate process limits the time that creditors can file claims against the estate; it can result in some debt elimination.
- Probate process provides finality to the deceased’s affairs and assets distributed are free of creditor claims.
- Probate process offers full disclosure of all asset information and costs and provides transparency of valuation for the benefit of the heirs.
- Probate process provides judicial determination of the provisions of the will when they are ambiguous, and the court can also decide inheritance disputes.