You may have heard that when it comes to estate planning, it is ideal to avoid having your assets pass through probate after your death. However, you might not necessarily know why that is true. Put simply, there are two big reasons to avoid probate:
The majority of what happens during probate is simply clerical work. In most cases, probate does not occur because of will contests or challenging parties, and as such, rarely requires an attorney to engage in the typical adversarial activities that other kinds of cases require. Rather, a New Mexico probate lawyer is essentially tasked with completing a large amount of paperwork and meeting filing deadlines and other technical requirements. Some states require that an attorney make a few court appearances, but in other states the majority of the probate process can be completed by mail; New Mexico allows individuals to pursue probate at an informal level when certain conditions are met that would allow the probate to be done entirely by mail, formal probate matters generally require at least one hearing before someone is appointed to act on behalf of the estate.
Both an attorney and the personal representative of the deceased person’s estate will be entitled to compensation for their participation in the probate process. Often, an executor will waive his or her fee if they expect to inherit considerably under the will at issue. With respect to attorney’s fees, the probate fee will be whatever the court decides is “reasonable” in the particular case. Some states base attorney’s fees on the portion of the estate which is actually subject to probate (New Mexico is not one of those states). New Mexico does limit attorneys fee to “reasonable fees” however the reasonableness standard is very liberal in what expenses are considered reasonable.
In addition to personal representative’s and attorneys fees, there can be costs incurred for appraiser’s fees and other expenses. As such, many people seek to avoid altogether, or at least reduce, probate fees. In New Mexico, fees incurred administrating an estate are generally the first items to get paid, before creditors, and even beneficiaries.
Another drawback to probate is that it generally ties up properties for several months or even years. It may be difficult to liquidate property in a timely manner (I’ve personally worked on probate cases that have had raw land listed for sale for over a decade). In some instances the personal representative may have to deal with real estate that has negative equity. Simply put, dealing with all the requirements of probate can take a long time.
Though a personal representative may be able to reduce probate fees by foregoing hiring a probate attorney, (appearing “pro se”), but as a practical matter, this is difficult to do in most states. Without the help of a lawyer, navigating one’s way through the vast amount of probate law can be extremely trying, and next to impossible.
With all these considerations in mind, it is usually best to avoid probate altogether if possible. To do so usually requires the assistance of an experienced estate planner, who can offer options and insight with regard to keeping one’s assets out of the probate courts. Avoiding probate not only saves time and money, it allows a person’s property and assets to more quickly get to those who are entitled to them. Be sure to contact our office for a free consultation to setup an estate plan that helps you avoid probate through the use non-probate transfer instruments and/or the use of a living trust (for more information see our article regarding the benefits of a living trust, or the article that answers frequently asked questions about trusts).