Avoiding probate has many different factors that could lead you to search out services and opportunities to avoid this process. However, it’s not the magic answer that addresses every problem that could show up after you pass away. These common misconceptions could make it more difficult for your loved ones in the future.
First of all, we recognize that avoiding probate doesn’t mean avoiding taxes. Those two activities and the management of each are not related at all. If you leave a lot at your death or give away a lot of money during the course of your life, this could trigger certain taxes, even though most people don’t need to think about the federal gift and estate taxes. Your family’s right to inherit is also not impeded by the probate process.
In certain circumstances, family members have a right to claim part of the property that you leave behind at your death. Not all techniques that you think will avoid probate actually. This is why it is important to consult with an attorney to draft a comprehensive plan for accomplishing your goals. Spouse and children rights are two of the most prominent. Finally, avoiding probate does not free you or your estate from the payment of legal obligations to your creditors.
If you don’t leave behind enough assets to pay your taxes and debts, any assets outside of probate could be subject to creditor claims after you pass away.
Creditors do only have a certain period of time to submit formal executor claims. A creditor who has been appropriately notified of the probate court proceeding is not eligible to file a claim after the deadline passes.