Common Misunderstandings And Myths About Wills

Mar 4, 2021 | Lifestyle

Most people don’t know much about the laws around wills, trusts, or probate, partly because they don’t like to think about it. It’s important to understand the basics of things like this, and know enough to recognise the common misunderstandings and myths when you come across them. Here are some very common misunderstandings and myths. 

1. The cost of probate will eat up all of the estate assets

There are a lot of stories out there about the astronomical cost of probate. If you believe the worst of these tales, you might think that your family won’t get anything after the fees of a lawyer and court costs. Luckily, this is not actually the case. 

Many estates don’t actually require probate proceedings. Only assets that were owned in the deceased person’s name alone need to go through probate. If the value of these assets is small, you can take advantage of probate shortcuts, which are a lot less expensive. 

If the estate does have formal probate matters required, costs are likely to be 5% of the total value of the estate. There are a few exceptions to this. 

In some parts of the country, lawyers charge a percentage of the value of the estate as their fee, instead of asking for a flat fee or hourly rate. If somebody contests the will, this can also push up costs, as the estate will need to hire a lawyer to defend it.

2. If someone dies without a will, the state gets everything

There are lots of good reasons to write a will but preventing the state from taking your family’s inheritance from them isn’t one of them. If you die without a will in place, then state law will apply. Each state has its own rules on who would then inherit. 

In most situations, your spouse or children would be the one to inherit. The rules vary, but usually, a surviving spouse and minor children would share the assets of the deceased parent. 

In some cases, assets do go to the state, but this only happens when there are no surviving relatives.

3. It takes years to probate an estate

Most estates will not take years to sort out. The main delay in most situations is mandated by state law that gives creditors time to file claims. This window varies in different areas but usually starts when notice of the probate proceeding is published in the local paper and will then run for three or four months to a year. 

After this period, the estate can be closed as soon as all the assets, paid debts and paid taxes have been gathered. 

Probate can drag on, but this is usually caused by other issues. If someone challenges the will, or children cannot agree on how to split up the assets of a deceased parent, then the court may have to step in, which causes a delay. 

If the estate is so large that it owes federal or state estate tax, then this can also slow the process down. Ongoing income can also cause delays, but in most cases probate does not drag on for years.

best,

– a contributed post

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