Very few things in life, or the law, are completely black and white. Most things are shades of gray. The correct answer to many legal questions is, "It depends." This also holds true when it comes to avoiding probate. Not everyone needs to plan to avoid probate as part of their estate planning (although a great many can potentially benefit from such probate-avoidance planning). Which group you belong in is something you must decide, ideally in conjunction with the advice and counsel of an experienced estate planning attorney.
In the third episode of the famed "Star Wars" movie series, one of the movie's protagonists, Obi-Wan Kenobi, instructs that, "Only a Sith deals in absolutes." (The Siths are the movie's evil antagonists.) The point of this statement is that almost all of the world is a series of shades of gray; very little is black or white. Anyone who speaks only in terms of absolute black or white either is being disingenuous, at the very least, is misinformed.
Estate planning can be like this. If you research estate planning, you'll come across a lot about avoiding probate. Some of that information will try to tell you that everyone is better off avoiding probate. While an awful lot of people can, indeed, benefit from the costs and delays that can be associated with certain types of probate administration procedures, that is not an absolute black or white thing. There are some situations where having your estate go through probate is better for you than avoiding it. Here's a list of a few examples:
- You have minor children - In many states, the only way you can name a guardian to care for your minor children or other legal dependents is through a valid will. In a lot of places, the courts will presume that the appointment of this person as guardian is the best interest of your children. The only way to bring that appointment to life, and the only way that a will can have legal effect, is if the will is duly probated. So, even if all of your assets were structured to avoid probate, you would still need to have a will and for it to be probated by the court in order for your naming of that guardian to be legally recognized.
- You have "problem" people in your life - Maybe it's a creditor. Maybe it's a relative. Whomever they have to deal with, there are some people who have people or entities in their lives whose presence could cause problems with the execution of your estate planning goals. It could be a contentious and uncooperative child, or it could be an unscrupulous creditor. Either way, situations like this are among the group of scenarios where the much larger degree of court oversight you get in a probate administration (as opposed to, say, the resolution of a living trust) can actually be a benefit, not a hindrance. The judge's greater involvement in your case could keep these "problem" people from derailing or complicating your estate plan and thwarting your goals.
- You have certain types of debts/creditors - The law in most all states creates a limited period of time for a creditor to demand payment of a debt from the assets of a deceased debtor. If the creditor waits too long, then the creditor loses the right to demand payment. One way to shorten this period is by opening a probate case. By starting a probate administration, you may be able to cap this "limitations period" for pursuing debts to periods as short as 6 or 12 months. Without it, the period may run for many years, even more than a decade. (For example, in Maryland, filing a probate administration case can shorten the period from 12 years to 6 months).
- You have only a very small amount of probatable assets - Some people may have very small amounts of assets. Others may have small amounts of assets subject to probate. Maybe you don't own much at all, or maybe you own a used car, a house titled under a transfer-on-death deed, a life insurance policy, a retirement account with a beneficiary designation, your pre-paid burial plan and a bank account with a pay-on-death designation on it. In either of these situations, your collection of assets subject to probate may be small enough that you qualify for your state's most simplified variants of probate. In those situations, as opposed to those who have to go through the full probate administration, completing the process can be very brief, quick and inexpensive.
As you can tell from these descriptions, these are all relatively specific situations. A great many people are outside all of these groups and can potentially benefit from avoiding probate with estate plans that include living trusts. The key thing to remember is that none of this is black or white. That is why you need an experienced estate planning attorney who can put his/her knowledge and skill to use for you and advise on what path makes the most sense for your circumstances.