Planning for Probate: The Importance of Attorney Involvement

       Two questions I receive from clients or potential clients are: “What is Probate?” and “Why is it important to plan for it if it isn’t something that happens until after my death?”

What it is: The Probate process is the method of Court oversight regarding distribution of your estate after death. Essentially, the court wants to prevent fraud and make sure the proper people (beneficiaries) receive the assets that you either gave to them in your Will or that these beneficiaries inherit by default if you have no will.

How it works: Yet the way in which this process works is rather complicated and can be especially distressing for an Executor who lives outside the state where you lived. That state oversees the Probate process. If you appoint someone who lives outside that state, the Executor will be faced with not only certain responsibilities concerning asset distribution but may also have additional state-specific requirements placed on her.

Additional Requirements: When drafting your Will, it’s important to consider certain issues, such as whether the Executor will be required to post a surety bond before serving. Every state will allow an out-of-state executor to serve, but some states have special requirements for executors, such as requiring them to post a surety bond or designate someone to receive court documents on the Executor’s behalf.

Bond: The purpose of such a bond is to prevent the Executor from running away with estate property that belongs to a beneficiary. This would be easy to do since the Executor will have control of your assets and property after your death to distribute them. If the Executor is required to post a surety bond (which may, in some cases, be up to 120% or more of the value of your estate, then in theory this acts as a deterrent.) 

When you are drafting your Will and other documents, you may be able to make it easier on your Executor and avoid posting of such a bond altogether. For example, in North Carolina, where I am located, posting of such a bond may be prevented if you specifically state in your Will that no bond is required. If the Will is silent on the issue or you have no Will, then it is up to the County to determine whether a bond will be required for your Executor and how much money the Executor will be required to post for the bond.

Other Requirements: There are also other requirements to consider when you want to appoint an Executor who lives outside the state where your will is executed. For example, some states require non-resident executors to appoint an agent who lives within the state to accept legal documents on behalf of the estate. In other words, your Executor will not be able to receive court documents directly reminding her of things that need to be done to move Probate along; she will have to appoint someone to receive them on her behalf and then trust that person to forward them on to her in a timely manner. This has the potential to make an already time-consuming process move at an even slower pace.

             In short, when drafting your Will, it is important to have the guided assistance of an Attorney to understand in general terms how the Probate process functions in the state where your will is created and executed. You will be able to make wise decisions on behalf of your loved ones and may be able to save your trusted Executor some additional stress by informing her of her own responsibilities ahead of time.