As a caregiver of an older adult, financial issues are never far from your mind. And helping to ensure your parent or senior loved one is able to preserve their legacy after death is a process best started as soon as possible.
Yet, whether you’re worried about health care decisions, tax implications or financial assets, estate planning can nevertheless be daunting. Plus, many people worry about their loved one’s assets becoming wrapped up in probate—the often dreaded formal legal process that administers a person’s estate after their death and also allows a judge to officially determine the validity of a last will and testament.
Joshua Hutkins is an attorney with St. Louis-based Sandberg Phoenix and specializes in estate planning. He also has extensive experience with complex and unique estate and trust administrations, guardianships and conservatorships, and helps adult children and their loved ones navigate the maze of medical care strategies, legal advice and state laws that affect their plan.
In a recent interview, Hutkins offered some peace of mind by answering some commonly asked questions about the probate process for Americans—and what older adults need to know as they approach estate planning.
Is going through probate that bad?
Everybody – whether they’ve gone through it themselves with a family member or they’ve heard about a friend going through it – wants to avoid probate.
A lot of families come to see us because they want to make sure that when they pass away, everything goes to their children (or another beneficiary) as easily as possible. And what they’re really saying is they want to make sure that their assets avoid probate.
If they were to pass away with no estate planning documents whatsoever, everything they have is going to go through the probate system. Because there’s no direction for the court, the court looks at what Missouri’s laws are, and it’s called the laws of intestacy—Missouri statute dictates who gets what.
How can estate planning help me avoid probate?
If they don’t want to do a full comprehensive plan, clients can avoid probate by simply putting beneficiary designations on all their accounts. But even by doing that, at the bare minimum, they should have a last will and testament, which basically tells the court, if there is something that goes through probate, this is who I want it to go to. And then you name a personal representative, which is the individual whom you have selected to administer that probate state.
I have a will already—isn’t that all I need to avoid probate?
People see in movies that when somebody dies, there’s a will reading. Everybody gathers in the lawyer’s office or in their study, and then somebody just reads the will and that’s it.
In reality, a will is only used if you are in the probate court. And if you’re not in probate, we don’t even look at the will. We don’t care what it says. Clients come in with the preconceived notion of, “I have a will, so my estate plan is set,” and we tell them, “Great, you’ve at least put down some direction, but we’re only going to use that will if we’re in the court system.”
To avoid the court system, you do the beneficiary designations. And if you want a really good plan, put together a revocable living trust. The trust says who gets what (like real estate, bank accounts, possessions, etc.), when and how. It avoids probate; you get to dictate all the terms of it, and it’s really a much more comprehensive plan.
I’m planning on passing down the family business to my children. Will that have to go through probate?
If you have an LLC, for example, and you pass away with no planning, that LLC, that business interest, is going to go through probate. And through the probate process, we then have to determine the value of it—and that’s a headache for both continuing the operations of the business and also making sure it gets down to the surviving spouse or the children. It will eventually get there, but it’s a headache.
How can an estate planning attorney help me through the process and avoid probate?
We try to make it as easy as possible by basically stating: This is what you have. If you do nothing, this is what happens. The worst plan of all is no planning.
It’s never too early to do any planning—whether it’s for the parents or for the children themselves. Everybody needs to have some type of plan in place. If you have no plan, you’re going to go through the court or your family’s going to go through the court for you—and then they’re going to have to deal with the brunt of it. It’s never too early to start planning. And it’s also never too late—until it’s too late.