An estate is probated when the Will of a deceased individual is filed with the Probate Court along with certain forms asking the Probate Clerk to allow the will and appoint the Personal Representative.
In the event that you die with assets held jointly with your spouse, or another individual, there will be no need to probate your estate; that is, to present your Will to the Probate Court for allowance and to distribute property in accordance with the terms of your Will. All property will automatically pass to the surviving joint tenant. However, it will still be necessary to obtain a tax clearance from the State of Maine Bureau of Taxation if any real estate was owned by you and a non-spouse.
In the event that you do own property at the time of your death in your name alone, or in the event that you and your spouse hold property jointly and you die in a common accident, your estate must be probated in order to transfer your property in accordance with the terms of your Will.
You may have read several articles suggesting that probate should be avoided. Many of those articles are written in states where the probate procedures are much more complex than those in Maine. Before you try to avoid probate you should carefully weigh the advantages and disadvantages.
The most common criticisms of the probate process are the time delay and the cost. Under the Maine Probate Code, both of these concerns are largely eliminated. First, there is an informal probate system in Maine so that an individual may have his Will allowed and the personal representative appointed within five days after his death. From that point on, the personal representative can manage the estate without any additional court intervention, so long as the beneficiaries of the Will are in basic agreement regarding the settlement of the estate.
A second concern in probating the estate is usually the attorney’s fees. Attorney’s fees were of greater concern prior to 1981, when some attorneys charged a percentage of the gross value of the estate as a fee. Under the new Probate Code, percentage fees are not permitted, and you will find that most attorneys charge for estate work as they do for many other types of legal work, on an hourly basis. In addition, the personal representative of the estate is free to consult any attorney he wishes with respect to probating the estate. He is not bound to employ the attorney who prepared the decedent’s Will.
Often an individual will try to avoid probate by placing all of his assets in joint name, relying on the surviving joint tenant to divide the proceeds equitably. This plan does not always work. For example, there have been situations where a surviving joint tenant, who was supposed to have divided the property equally among his siblings, argued to the other children that he took care of his parent for years before the death and that the parent intended that he have the entire account after his death. Furthermore, placing certain assets in joint tenancy may cause that child to incur excessive and completely avoidable capital gain taxes when that child ultimately sells the property.
However, there are certain situations in which probate avoidance is very desirable. For example, if you own real estate or property in another state, you may want to avoid probate in a second state.
At Ballou & Bedell, we will be happy to discuss all of your options with you. If you feel strongly about probate avoidance, we can discuss a Revocable Living Trust the device most commonly used to avoid probate.