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What is Probate?

Simply stated, “probate” is a process whereby someone seeks to receive court approval to be the person in charge of managing the final affairs of a person who has died.

Why are people so concerned about avoiding probate?
The reasons to avoid a lengthy court battle over an estate are obvious. But what about more simple probate cases where everyone is getting along? Straight forward cases usually involve what is known as an “informal” probate process. While the informal probate process does not require hearings, it does involve the filing of a petition and supporting documents, sending an inventory and notice to interested parties (if not waived), publishing notice to creditors, sending an accounting to the beneficiaries (if not waived), and filing a closing statement. Informal probate is nothing to be afraid of, but it can still be very time consuming and some find it complicated. Many executors (known as “personal representatives” in Utah) lack the time or willingness to struggle through a probate on their own, so they hire a law firm to help. Attorney fees for informal probate cases vary, but typically start around $1,500 and can exceed $5,000. If your designated personal representative works full-time and/or is unwilling to complete a large set of paperwork, he or she will probably consider hiring a law firm. In short, administrative burden and costs of attorney fees are the primary reasons people want to avoid probate.

When is probate necessary?
For many, the word “probate” brings to mind images of court battles drawn out over many years. While fights about who gets what can certainly lead to a drawn out probate proceeding, the more common scenario is that the deceased person simply had assets that the family is not able to take control of now that he or she is gone.  In other words, if assets are stuck in a decedent’s name and you can’t deal with them, you’ll have to initiate probate. On the other hand, if no one is stopping you from dealing with the assets, then there is likely no need for probate.

How can I avoid probate?
Definition of “estate”: To understand probate avoidance, it is helpful to first understand what an “estate” is. Basically, an estate is everything that is left in your name when you die. Generally, this means everything besides assets in a trust, assets with a beneficiary designation, or assets that are jointly owned.
Small estate affidavit: In Utah, smaller estates may avoid probate by using an affidavit to collect the assets.  This option is available if the cumulative total of estate assets do not exceed $100,000 and do not include real property.
Beneficiary designation: Assets with a beneficiary designation incorporated into the ownership documents avoid probate. The most common example is a life insurance policy in which the policy owner names who will receive the death benefit within the policy documents. This option is also available for many investment accounts, bank accounts and automobiles. In Utah, as of May 2018, it is also available for real property by way of a transfer on death deed.
Joint Ownership: Assets that are owned by more than one person pass to the surviving joint owner without the need for probate.
Trusts: Assets that are funded to a trust will pass to the beneficiaries of the trust without the need for probate. Many people prefer trusts to the other methods of avoiding probate because they offer asset protection to the beneficiaries and avoid issues that can arise with joint ownership (e.g., rogue joint owner, joint owner creditor problems, etc.).  Trusts can also be drafted to protect the assets of the makers of the trust during their lifetime.

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[This publication is for informational purposes only and does not constitute legal, financial, or tax advice.  The contents should not be relied upon without consulting a professional.]

© Copyright 2018 Hadfield Law Firm, PLLC

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Hadfield Law Firm | Preserving your legacy - Building your trust | Lehi, UT
5 out of 5 stars My husband and I went in to meet Matt after being recommended by another attorney. We went in not knowing much about estate planning. He taught us so much, he’s very patient and caring and willing to answer endless questions and to explain things we knew nothing about. Our experience with Matt made us feel prepared and reassured that he will continue to be there for us when we need help. We also felt our purchase was a great deal and he offered different payment options. And again he could have tried to upsell us and get us to spend more money for “important” reasons and never tried that once. I would absolutely hire Matt again and I’m so grateful we met him and got to achieve our goals with an honest and helpful person.
Hadfield Law Firm | Preserving your legacy - Building your trust | Lehi, UT
5 out of 5 stars Professional in every way!
Hadfield Law Firm | Preserving your legacy - Building your trust | Lehi, UT
5 out of 5 stars I worked with Matt in 2015 to help me understand and administer my father’s trust. I needed reliable and honest expertise in Arizona since I reside in a neighboring state. Matt’s experience and guidance was instrumental in helping me understand and execute the trust. He assisted me every step of the way, explaining and re-explaining (when necessary), administering paperwork, and providing references to contractors and service providers so that I could complete tasks quickly. I am grateful for his counsel during my time of need. I would fully recommend Matt and his team for anyone needing estate or trust assistance.
Hadfield Law Firm | Preserving your legacy - Building your trust | Lehi, UT
5 out of 5 stars Creating a Living Trust is a difficult task and can be very challenging. I had the pleasure of working with Matt who not only took the time to explain everything, but also explained various options in an effort to accomplish what I needed. He is a great communicator, explains things well, and listens to your needs. He's very professional with a warm personality, maintains his commitments and is very knowledgeable in his field. His honesty and desire to assist provided me comfort and made me feel very satisfied with the overall outcome. I highly recommend Matt for any estate planning you might be considering. His qualifications and performance are truly excellent.