Some people in North Carolina may have heard about various estate planning strategies they could use to avoid probate, such as using a trust or beneficiary designations instead of a will. However, they might not know why they would want to avoid probate in the first place.
What is probate?
Probate is simply the legal process that an estate must pass through. Assets have to go through probate if the person uses a will or if the person does not have an estate plan. In the latter case, the court appoints an executor and the state determines how assets are distributed. Probate is not an inherently bad process. It is fairly straightforward, but the executor is required to complete a lot of paperwork. This can be time-consuming. Executors can also hire financial and legal professionals if necessary in order to manage the probate process and pay them out of the estate. There are also administrative costs associated with having a trust, so that is not necessarily cheaper.
What are the disadvantages?
There are a few other potential disadvantages to probate. Some people prefer to use a trust or other methods to pass assets because they are private while the probate process is public. Probate also means that beneficiaries do not receive assets until the process is complete, and this can take several months or over a year in complex cases.
Probate can also be costly for people who are very wealthy, and in those cases, trusts or other vehicles may be better for passing most assets. Some people use several different strategies for estate planning or might have most of their assets in trusts along with a pour-over will that places the remaining assets in a trust. An attorney may be able to help an individual determine whether there would be advantages to avoiding probate in their particular situation.