The way the estate distributes assets depends on the state. But, it’s very unlikely the state will claim the estate’s money or assets. If someone passes without leaving a will, their spouse and/or children will most likely inherit their estate.
7 crazy myths about wills and probate. [Don’t fall for these misconceptions!]
Planning for what happens after the loss of a loved one is difficult. In fact, most people don’t know what to expect when it comes to the estate after a relative passes.
Do you know what happens after the will is read?
What it means when the estate goes into probate?
Our team at Surety Solutions, A Gallagher Company helps our clients get the Surety Bonds they need at the best value, including Probate Bonds. Throughout the years, we’ve heard many misconceptions about probate. Below are the 7 most common myths about wills and the probate process.
Myth 1: If there is no will, all the estate’s money and assets go to the state.
Distant relatives are only sought out if the deceased doesn’t have immediate family. The only reason the state would get the estate’s assets is if they are unable to locate any blood relatives. Which again, is unlikely to happen. However, unmarried significant others and friends don’t get anything if there isn’t a will.
Myth 2: The probate costs use up most of the estate’s assets.
It’s true. Probate can be costly. Yet, most probate cases only cost between 2%-7% of the value of the estate. These costs are court fees, such as attorney fees, asset appraisals, accountant fees and more.
This is a common misconception because the probate costs can skyrocket when the will is contested. The longer the case is in the probate, the costs increase. Still, probate shouldn’t use up a majority of the estate assets.
Myth 3: The oldest sibling is automatically appointed as the executor of the estate.
The executor being named in the will is common practice. However, if the will doesn’t state an executor, or the court finds the selected executor unfit for the role, it’s the court’s duty to appoint a relative of the deceased.
Most states give priority to the surviving spouse. Although in some cases, a child of the deceased is appointed.
Some believe the oldest sibling has superiority over their younger siblings when an executor of the estate is appointed. In reality though, being the oldest doesn’t mean he or she will be appointed executor.
If the siblings can’t agree on who is to be executor, the probate process drags out as the court decides who is to be appointed the executor. The extra time in probate inevitably causes the probate costs to increase.
Myth 4: The Probate process takes many years to resolve.
The length of the probate process depends on the state, but it shouldn’t take longer than a year to complete for an average estate. However, if someone contests the will, the probate process can last a long time. The longer the probate process drags out, the more it will cost.
The probate process can last a while, but as long there are no disputes about the will, it shouldn’t take multiple years to resolve.
Myth 5: The estate pays the Probate Bond cost upfront.
If the court requires a Probate Bond, the executor is responsible for getting a Probate Bond. The estate’s money and assets are not distributed until after probate ends, so the executor has to pay for the Probate Bond upfront.
The cost of the Probate Bond is not refunded to the executor after probate completes. For this reason, it may seem more appealing to avoid paying the cost of the bond by posting cash with the court instead. Unfortunately, if the court orders the executor to get a Probate Bond, then posting cash is not an option.
The good news is the executor doesn’t need to have all the cash upfront when getting a Probate Bond.
As an example, if the court is requiring a $75,000 Probate Bond, the executor will only need to pay around $375 for the bond in lieu of having to come up with the $75,000 in cash.
Myth 6: The executor can’t get a Probate Bond with bad credit.
Similar to a loan, Probate Bond approvals are based on your personal credit, financial standing and the amount of the bond. However, you may still be able to get the court-ordered probate bond, even with less-than-great credit.
Surety Solutions, A Gallagher Company has partnered with several top surety companies to offer free online quotes for Probate Bonds. So you don’t have to waste time or money while shopping for your bond.
Myth 7: The Probate Bond protects the executor appointed by the court.
No, the fact is the bond does the opposite. The Surety Bond doesn’t protect the executor, it’s in place to protect the heirs of the estate. The beneficiaries receive compensation for any costs paid out from the estate if the executor fails to perform his or her duties ethically and honestly or makes errors.
If the surety does payout on a claim, the executor is responsible for repaying the surety back in full.
When is a Probate Bond required?
When an estate goes into probate, the court decides if a Surety Bond is necessary. The will may state that isn’t necessary, however the court can override this stipulation in some states.
If the deceased didn’t leave a will, the court will almost certainly require a Probate Bond.
How much does a Probate Bond cost?
The cost of a Probate Bond depends on the value of the estate. Fortunately, the executor doesn’t have to pay the full amount of the bond.
The actual cost of the bond is a small percentage of the bond amount. Most of our clients pay between 0.5% – 2% of the bond amount for their Probate Bonds.
Where do you get a Probate Bond?
Conclusion: The will and probate process demystified
We hope the probate process and how it affects the estate is much clearer now. Probate can be a long and expensive process, but knowing what’s fact and fiction will give you more confidence when navigating the process.
About Surety Solutions, A Gallagher Company
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