Probate or Pro-bait? Navigating the Minefield of Probate Matters

Learn the fundamentals of probate, estate planning, and how assets are passed on after death. Whether you're planning for your own future or helping a loved one, this episode offers practical insights into making informed decisions about your estate.

Transcript

Hey folks. Peter Klenk at Klenk Law talking to you once again about death and taxes and all the fun things surrounding estate planning and trust and estate work.

So today, let's talk about probate, or as a lot of people think of it as probate—sucking you into something that you don't want to be hooked on—which might be true or not. So let's talk about that.

So, yes, we're all gonna die, guys. I know. I know. I know. You guys who are listening don't believe that to be true, but okay. Humor me as we go along here, that someday we're gonna pass, and that means all of our stuff, whatever it is, is not gonna go with us.

It's all gonna go to somebody else. That process, historically, has been called probate.

Now, what does that mean? What is that? Well, guys, we've had probate always because as soon as we had stuff as human beings and we died, the tribe or the group or whoever's around us had to figure out who got it.

I mean, did your son get it? Did your wife get it? Did the chief get it? Did the priests get it?

There are rules. Right? All those rules are probate—who legally gets your stuff when you're dead. That's probate. So you can see it's a necessary thing because, you know, there's stuff.

We gotta take care of it. And it's just good that you understand what those rules are because if you do nothing, the default rules that have been around for thousands of years and been developed are gonna kick in. And you might be okay with that, but you might not be.

In Pennsylvania, if you're married and you don't have kids and you die without a will, half of your stuff goes to your parents. It's an old rule, but the idea is they expected your spouse is not gonna take care of their dead spouse's parents. They're gonna all get married again. So they presume you wanted to take care of your mom and dad, so that presumption exists.

Is that what you really want? I don't know. But if not, see a little bit of planning. You can do whatever you want. That's just the default rule that's out there.

So, okay. What is this process in general? I'm gonna go through the ten-thousand-foot level here, guys.

Somebody dies. Somebody has to be put in charge. A human being. Right? And they don't just magically become in charge.

This person is appointed by the king. Right? By the government. So you have to petition the government—the county usually. This might be in the form of going to court.

There might be somebody specially tasked with this. In Pennsylvania, it's called the Register. In New Jersey, it's called the Surrogate. And that petition has to be approved. And they, of course, everybody has a process and they all take a check. Right?

Yeah, you know, gotta pay the king. King needs some money. So there's a process that costs some money and takes some time.

Every state again is different, and it does mean that if you own real estate in two different states, you have to do this twice. Three different states—three times. Right?

Every state controls its own real estate, so that can be an adventure for folks who own a number of properties throughout the states.

If you own something overseas, hey, you gotta deal with that government overseas and that can be an adventure. So, you know, make sure you've gone through this.

That process is there. And usually, there again, there are default rules, but you're able to opt out of them to a certain extent.

Like in most states, you don't have to leave your kids anything. If you wanna leave everything to a charity and your kids nothing—that's your prerogative.

But if you die without a will, your kids probably get the stuff and the charity gets nothing. So you have to kind of think through what you'd like to do. Right?

And in that process, do you want it to go directly to people? Or do you have a minor child?

Or do you have that daughter-in-law that you don't really wanna get half your stuff when the divorce happens? There's ways around that too we can talk about.

But now just preparing—you can have a will. Right? The will is a statement of what you want to have happen when you die.

You get to pick the person who's in charge of that process. They execute your plan—the executor. And the guardians, if you have minor children.

You get to explain what should happen with your pets. And is there some money to make sure that your older pet is taken care of?

You know, who gets your furniture, your car? All these things can be addressed in the will.

These are very simply saying, "Look, everything goes to my son." Done. Everything's everything.

Or you can be very specific about things and get into a lot of detail. Totally up to you. Everybody has their own way that they'd like to address those things.

Then probate, though, of course, like I said, takes some time. There's a check. Right? There's a process. There's paperwork that has to be filed. There's oversight.

It's all good, guys. I mean, it's there to make sure that your wishes are respected. But some people would prefer to avoid that. They would prefer to not have to deal with the government.

Is there ways to do that? Absolutely.

There are beneficiary designations, there's transfers on death, or if you prefer, you can use what's called a revocable trust, which also then allows you to accept trust after you die so that, again, that daughter-in-law doesn't get any money.

Let's not pick on the son-in-law too. Not just daughter-in-law.

Or just, you know, your kid's safe. Or especially if you have a special needs person, somebody on government benefits, there's ways to set these things up in this process so that they're taken care of.

So you avoid all these potential mines that can blow up and cause trouble if you do the planning ahead of time. Right?

And you work with somebody like myself. I've been doing this since Desert Storm—back in way back in the nineties when the Navy deployed.

So I've been doing this a long time. Talking to people. Figuring out what needs to be done so that we avoid the potential mine—the explosion in the future. We just wanna avoid the whole thing.

So if you map everything out, then it can be smooth and easy.

A revocable trust in general works, and there's plenty of articles and things written about this—you can read more.

But with a revocable trust, the idea is you don't file anything with the county because the trust owns the assets, and when you pass, the trust continues. It doesn't need to be registered, and it doesn't need to get permission from the county to exist because you created it and it existed while you were alive. Right?

So that's a very broad stroke there, but we can get into more detail.

So, yes, there are things out there with probate that you might want to avoid. Right? So we should plan around them.

Using a will still might be fine. Going through probate, filing it—people have been doing it for hundreds of years. It's not evil. But there's ways to even avoid that if you want to. Not a problem.

Should you like to talk about more? Give us a ring.

It's 215-790-1095. That's our general number that you can call and we set you up with whoever's the right person for you to speak to.

Brainstorm about some options, and then we can always tell you what that would cost, and you can decide if you'd like us to help you out.

We would be happy to do so.

So anyway, it's Peter Klenk. Like and subscribe, please, so as we go along, you can hear my soothing voice in the future. And you just have a great day.