Fact or Fiction: Debunking Myths about Estates
Myth 1: Having a Will eliminates the need for probate.
First, let's clarify what “probate” actually means. Probate is the legal process through which a deceased person's Will is validated by a court, and the executor (or Personal Representative) is granted the authority to distribute the estate according to the Will's instructions. We can distinguish two concepts here:
The Court Process: Applying for a “Grant of Probate” if there is a Will, or a “Grant of Administration” if there is no Will.
The Rest, i.e. Administering the Estate: This involves gathering the deceased person's assets, notifying any relevant parties, paying any outstanding debts and taxes, distributing the remaining assets to the rightful beneficiaries, keeping records, filing taxes, etc.
A "Grant of Probate" is a legal document issued by the court that confirms the validity of the Will and the authority of the executor. This document allows the executor to proceed with administering the estate as outlined in the Will. A “Grant of Probate” from the court can be thought of as a stamp of approval from the court that allows the administration of the estate to proceed as outlined in the application (following the terms of the Will). Importantly, having a Will does not, on its own, eliminate the need for probate; it streamlines and clarifies the process. The Court process on its own is not as scary as popular media may lead you to be believe (and not as expensive either).
If a person dies without a Will, the process is referred to as obtaining a "Grant of Administration" rather than a "Grant of Probate." In this situation, the court appoints an administrator, typically a family member (with priority to apply set out under the law), to manage the estate. The distribution of assets is then governed by intestate succession laws, which dictate how the estate should be divided among the deceased's heirs. This process can be more complex, involve more court supervision, and may lead to disputes among family members.
Contrary to popular belief, having a Will does not eliminate the need for court involvement. Instead, a Will serves as a crucial tool that makes the probate process more straightforward and efficient for the loved ones left behind.
Myth 2: Wills are just for the elderly and the wealthy.
It's a common misconception that only the elderly or wealthy need a Will. In reality, anyone over the age of 18 with assets, no matter how modest, should have a Will. Assets can include personal belongings, bank accounts, retirement accounts, life insurance policies, real estate, vehicles, and valuable items like jewelry or art. Contrary to popular belief, single adults with no children and no real estate can benefit from a Will - they likely have bank accounts, perhaps investments, and a vehicle, and all of those assets will need Court approval to be transferred.
Having a valid Will ensures that your assets are distributed as desired. Without a Will, the court system will handle your affairs, and the distribution and inheritance may not align with your intentions. It's also important to note that no one will have any authority until the court signs off.
Myth 3: Family members will automatically take guardianship of your children.
Another common misconception is that family members will seamlessly assume guardianship of your children in your absence. However, this assumption can lead to unfortunate outcomes. As a parent, it is essential to establish specific parameters for the care of your minor children.
While the court still needs to approve any guardianship arrangement, having your preferences set out in a Will allows you to voice your wishes to the court when you would otherwise be unable to do so. If you have made a formal statement about guardianship, the court must consider your preference in their decision-making process. By outlining your preferences in a Will, you can provide clarity, alleviate stress, and ensure a stable future for your children during an extremely difficult time.
Myth 4: You are on your own as a Personal Representative.
Being an executor or administrator is a significant responsibility that involves managing numerous duties. This can be overwhelming, especially while grieving.
However, you are not alone in this role. Hiring a lawyer experienced in estate matters can be invaluable. They can guide you through the probate or administration process, handle necessary applications and paperwork, and provide legal expertise and support.
An accountant with expertise in estate administration can also be a valuable resource. They can offer advice on tax implications, asset valuation, and financial management during the process. They may also assist with estate accounting, ensuring that all financial aspects of the estate are handled properly.
Furthermore, a trust company can provide professional help in managing and handling an estate. A trust company is a specialized financial institution that offers services related to estate planning, asset management, and trustee duties. They are licensed and regulated to provide these services and have expertise in managing trusts and estates. A trust company can act as a professional executor or administrator, overseeing the distribution of assets according to a Will or applicable laws. They can navigate the complexities of the probate process, ensure compliance with legal requirements, and efficiently manage the estate's affairs. They can also provide continuity and impartiality in estate administration, especially in cases where family dynamics might be complex or prone to conflicts. It's important to consider their rates in the context of any particular estate.
Remember, you do not have to navigate the executor's role alone. Exploring different professional options can provide the support and expertise you need to fulfill your duties effectively.
Disclaimer: The information provided in this blog post is for general informational purposes only and should not be considered legal advice. For specific legal advice, please consult a qualified professional.
Thanks very much to Katelyne Steele for her assistance in preparing this post! We are so grateful to have her. Here is some more info about Katelyne:
Hi, my name is Katelyne, and I am a policy studies intern at Modern Wills for the 2023 summer! I enjoy the opportunity to research and inform on estate legislation, rules, guidelines, etc., for our clients to read and better understand estate planning.