Have you asked your parents about their estate plans? Chances are, it feels like a delicate subject. We don't want to pry, or seem like we're waiting for our parents to pass, so we don't ask. We think, “It'll be ok if they don't have a plan. Probate couldn't possibly be that bad.” In this way, we convince ourselves that the burden of probate is easier than having an uncomfortable conversation with our parents. It seems like a fair trade-off. But, what if probate is actually a lot more burdensome than you realize? Would that change the calculation? Then would it be worth initiating that tough conversation with your aging parents?
Here are five reasons you may want to reconsider your silence.
Even though the probate process is the default procedure by which a deceased person's stuff is distributed to heirs, it is surprisingly expensive. In the State of Maryland, probate costs anywhere between three and seven percent of the total value of the “estate” (basically, everything your parent owned). How expensive probate will be depends on a number of factors, including the complexity of the estate, its size, and any conflicts that may arise. Typical probate costs include attorney's fees, court costs, and expenses for things like hiring an appraiser, realtor, and CPA. Wondering how your parents' home will factor into the total value of the estate? Maryland calculates the value of a home based on the date of the owner's death and does not take any amount owed on the mortgage. For many families, this dramatically increases the total amount of the estate, increasing the total cost of probate.
Did you know that the probate process is a part of the public record? That means your parent's Will (if they have one), the total inventory of their estate, claims creditors may have against the estate, and any conflicts between family members will all be recorded and made available publicly for all to see. For some, this may not seem like too big of an issue. For others, especially those who highly value privacy, this can be a major red flag.
In Maryland, probate typically lasts between twelve and eighteen months. Why would it take so long? Well, there are a number of steps that need to be followed, and each takes time. The creditor claim period alone takes six months. This is a time that is required to leave probate open so any companies or individuals who claim they were owed money by the deceased person have time to record their debts with the court. Because all creditors must be paid, including final taxes and all probate costs, before the heirs receive distributions from the estate, any beneficiaries will have to wait the full length of the probate period before they can expect to take ownership of any funds or property.
How close do you live to your parents? Probate is conducted in the county where the deceased person lived. That means, if you live any significant distance from your parents now, you may have to travel repeatedly back and forth to meet with attorneys, appraisers, and other professionals, as well as to appear for court proceedings. Each trip will cost you time, money (if you have to fly or stay in a hotel), and missed work.
Someone (possibly you) is going to be appointed by the court to oversee the probate process as executor. The executor is not only in charge of conducting every step of the probate process, he or she is also legally bound to the process as a fiduciary of the estate. Let us tell you, being an executor is no cake walk. It takes ample time, planning, organization, and real work to guide a deceased parent's estate throughout the probate process.
With all this in mind, do you really want to see your parent's estate pass through probate? My guess is you do not. Perhaps it might be worth having a conversation with your parents about how a careful estate plan can keep their stuff out of probate and save you a lot of time, money, and effort down the road. Not sure how to start that conversation? Luckily, you don't have to do it alone! Give The Tyra Law Firm a call at (301) 315-0811 to get a compassionate, experienced attorney to help.