Of all the questions that we encounter, “should we avoid probate, no matter what?” is the most popular. The direct answer to that question is “no, absolutely not.” However, the better question for people to ask is “Should I try to avoid probate?” and the answer to that question is “Perhaps.”
The beginning point for that discussion is to understand that probate is not the nightmare that many believe it to be. In our experience, that is especially true in Colorado and maybe even moreso in Mesa County. Our probate judges are capable and attentive to people in that difficult setting and their support staff are genuine and caring. However, with that said, there are still times when avoiding probate makes sense. Your individual estate plan should determine whether avoiding probate is right for you and your family.
Probate is a process to transfer the assets after someone dies. For example, when a home owner passes, probate allows for the home to be sold or transferred, if necessary, even though the owner is no longer alive to sign a deed. Many have been told probate is a process they should avoid, usually (they are told) because of its cost; ironically, those who push to avoid the costs of probate often have something to gain financially by a person making that choice. So, to avoid probate, many people take shortcuts — sometimes even spending more on the shortcut than probate would have cost.
In some cases, there are legitimate reasons to avoid probate and its cost. But the alternative must be effective. A shortcut should never jeopardize the assets ending up where the deceased wanted them to be. For example, a client once provided us with a copy of a beneficiary deed, which is a deed that transfers property to a designated person (called a “grantee”) immediately upon the death of the person who signed the deed (called a “grantor”). The beneficiary deed was signed and recorded with the recorder’s office like a typical deed, but by law, it would not transfer title until the grantor passed away.
At first glance, this may seem like a great shortcut to avoid probate. Unfortunately, because no one knew about the beneficiary deed except the grantor and the grantee, the remainder of the estate plan did not take the beneficiary deed into account. As a result, when the grantor passed away, the land was transferred to the grantee, but the will contained conflicting instructions regarding the property and, instead of avoiding probate, the grantor’s estate was tied up in court for over a year. The family was torn apart and the costs to resolve the confusion were significant.
In this case, and many others, the reality is that the last will and testament and the probate process would have made certain the land ended up with the intended grantee. The simple word of warning is to avoid shortcuts that may cost you control over your own estate plan. When it is possible to avoid probate, that is a great result; but sometimes it is best to let the probate process make certain that the estate plan is followed. A good estate planning lawyer can help you determine which option is best for you and your family and, many times, the cost of that effort pays for itself in savings down the road.
We discuss these, and other, estate planning matters in our no-cost seminars. Due to the precautions we are all taking in light of COVID-19, we are changing the format of these seminars to telephonic participation so that we can be careful, but still share relevant estate planning information to as many people as possible. If you are interested in participating, or if you have any questions about this article or topics you would like us to address in future columns, send an e-mail to Admin@GJlawyer.com or call (970) 270-1213. Ext.4
Brad Wright’s business and estate planning practice includes transactional matters with a special focus on business succession. His brother, Steve Wright, has a similar law practice in Idaho Falls, Idaho and, together, they assist businesses of all sizes and types with a wide variety of legal issues.
© 2020 Brad R Wright, Steven J Wright