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Avoiding Probate: It’s Not Just About Money…

Avoiding Probate: It’s Not Just About Money…



               As an estate planning attorney, a central goal that I preach is for my clients to avoid probate.  Most of my clients associate probate with something akin to the plague and people like bankers, insurance agents, financial advisors, TV hosts and society at large have done a good job educating clients on the simple premise that they should avoid probate at all costs.

But why?

Most people would guess the expense.  That is certainly a legitimate reason.  In Missouri, a probate administration can lead to costs to the court, big expenses being paid to your personal representative (also known as the executor) and, if you want the easy version of probate in Missouri, independent administration, the services of a knowledgeable and experienced probate attorney.  In a recent probate, an approximately $450,000 estate ended up costing about $1,000 in costs to the court for filing fees, inventory fees and various other expenses and approximately $31,000 in fees split equally between  the personal representative and attorney .

Think about that for a second…that represents almost a 7% loss in the value of your probate estate due to costs and fees, or one more percent than you pay to sell a home!  But here’s a big difference…real estate commissions are unavoidable.  Probates costs and fees are not.

But forget about money and costs for a second, because there are three other huge reasons to avoid probate, that are largely overlooked.

Those are:

  1.   Time: In Missouri, you have to wait 10 days after death before you can file in most cases and then the estate cannot be closed for at least six months.  Best case, therefore, you are looking at a 190 day process.  In most cases, you can add at least a couple of months.  In some cases, the estate won’t be closed for at least a year, sometimes longer.  So, not only have you lost a loved one, but now as a beneficiary or heir of an estate you have to wait a long time to get your inheritance!
  1.  Complexity:  I work on probates every day and while I do a great job for my clients I have to say….I don’t like doing them.   Absolutely cannot stand them.   St. Charles County has a terrific probate division but many of my probates are in St. Louis County and they are a nightmare to deal with.  If you can get through to someone, you will get two different answers from two different people.  Every county has a different set of procedural details that must constantly be adhered to, which is tough because those details seem to change by the month.   Probates are comparable to getting your teeth pulled.  The smallest details can delay them for days and even weeks.
  1. Family Issues / Strife:  Imagine with your family who would be more than a little bit anxious / conspiratorial about an inheritance owed to them.  If someone makes out a will and then dies, unlike on TV, there is generally not a reading of the will.  That is largely a Hollywood created fiction.  In larger estates with a variety of distant relation family members or different beneficiaries (like people that don’t know each other), it might make sense to have a will reading.  So people think that something is being hidden from them when the personal representative and the attorney for the estate don’t just cut them a check.  Probates cause family tensions and in families where there is already tension, it can only aggravate things.  As I noted above, you have to wait at least 190 days in most probates before the estate can be distributed and closed and that’s because creditors have a right to make a claim against the estate.  I very rarely authorize early disbursement of an estate for this reason.  Who knows who is out there claiming they are owed money.  If the money in the estate is immediately distributed, how are you going to get it back if a creditor shows up out of the blue in the last month making a huge claim against the estate?

Half of my estate planning clients are meeting with me because they know they need to.  The other half are meeting with me because they just had some terrible disaster happen in there family or watch it affect someone they know, so now they want to avoid it.

Here’s the silver lining:  It is easier than ever to avoid probate with a living trust or even without a living trust under some circumstances.  In less than an hour Legacy Law Center can sit down with you, figure out what your particular circumstances are, what you need based on those circumstances, tell you what it costs and give you a accurate timeline of when it will be completed, signed and in your hands protecting you and your family.


Do I Need An Attorney For Probate In Missouri?

Do I Need An Attorney For Probate In Missouri?

Do I Need An Attorney For Probate In Missouri?

    Yes.  You do need an attorney in Missouri for probate.  Here is why:  First, in order to proceed with an independent probate administration, state law requires it.  Under RSMo. 473.787 (3) (link:  http://www.moga.mo.gov/mostatutes/stathtml/47300007871.html), an independent personal representative (executor) shall “secure the advice and services of an attorney” on legal questions arising in connection with matters related to the opening of a probate estate, applying for an the issuance of letters testamentary or administration, preservation of estate assets, the inventory of the probate estate, dealing with creditor claims and their payment or resolution, filing of tax returns, making distribution and the closing of the estate.

So basically Missouri law requires it if you want to proceed independently.  The alternative is to proceed with a supervised probate estate, which is often specifically not called for either under the will of the decedent.   Because the last will and testament controls the actions of the personal representative, often an attorney must be hired.

Secondly, a probate estate should be opened with the assistance and services of a probate attorney because opening, administering and closing an estate is complex.   That’s a practical consideration.  In addition, probate matters can be very emotionally draining for families.  If you’ve ever lost a loved one, you know how emotionally charged that situation can be.  If you’re the executor named in the will,  you’re often going to feel a lot of pressure to get things done quickly.  I’ve seen this happen in the closest of families.  Family members often don’t understand that just because there is money in the estate, that money just can’t be immediately divided and checks cuts.

Also, remember, the problem is that you owe a “fiduciary duty to the persons interested in the estate” (i.e. the heirs or beneficiaries).   There is no incentive for you to handle the estate alone and in fact, if you do so and then claim you were not up to the task, you can be held personally liable for any of your errors.   Frankly, a person handling an estate without any knowledge how to do so is already engaging in a breach of their fiduciary duties.

Finally, remember the probate process in Missouri is complicated and requires you to devote time to handle it.  Very few estates are as simple as people believe.  Assets cannot be found, creditor claims pop up that were previously unknown.  Deadlines must be met and the court has little to no mercy on those that claim they aren’t attorneys.  With the help of an attorney, those deadlines can be met and headaches can be avoided.

Your best bet is to work with a probate attorney and let them handle all of the filings.  The best part?  You’ll still be involved in the process and still earn a statutory fee (usually the same amount as the attorney) for serving.

Estate planning simplified

Estate planning simplified


Chances are if you have done a little research on estate planning, it might be confusing.  The Internet can be like trying to take a sip of water from a fire hose.  So this blog entry is entitled Estate Planning Simplified…I’m gonna break estate planning and the thought process behind it into three questions.

1.  Who do you love?

This question is as simple as it reads.  Who are the people you love?  Family, friends, colleagues, neighbors, pets?  Is there a charity you love?  You can probably arrange the people you love in your head very easily.  These are the people that we want to be part of your estate plan.

2.  What do you have?  

Make a list of what you have.  Checking accounts, savings accounts, money market accounts, CDs, bonds, promissory notes, stocks, annuities, 401(K), IRA, cash, jewelry, a home (primary residence, vacation home, acreage, farm land, timeshares), vehicles (cars / boats / trailers).  This is a great exercise because most people don’t keep a running list of everything they own.  But you’ll need this to do your estate plan.

3.  Who do you trust?  

This is distinctly different, as well all know, than making a list of who we love.  Hopefully you trust your spouse.  From there it can get tricky.  Do you trust all of your children?  Is there a child or children you trust most?  Is there a child you don’t trust at all?  You may ask, well, in what way do I trust them?  Great question.  Do you trust them with money?  Do you trust them to distribute your assets or hold your assets like a trustee or executor is required to do?  Do you trust them to follow your wishes on your death bed with your healthcare directive?  If you don’t, why not?  If you don’t have children, but are married, who would you trust literally with your life if your spouse wasn’t around?  These can be tough questions to think about and answer but they must be answered in completing your estate plan because you need people you trust to make all sorts of decisions if you can’t.

So these three questions, once answered, represent the essence of estate plan.  You should have peace of mind once you have answered them.  The next step is to follow through with putting that peace of mind into writing.  The tangible result of that is paper…your estate plan.

Changing an estate plan…

Changing Estate Plan





I spend a good amount of time each month reviewing existing estate plans of former clients and non-clients. Very often the estate plans I am reviewing are those of    a pair of empty nest parents, who want me to review the wills they created when their first born child was born. This is a very common scenario and I applaud these people for understanding that their estate plan needs change over time.

Here are just a few examples of when it’s a good idea to have your estate plan reviewed.

1. Your old plan was drafted when you either had no children or before all of your children were born.  This is a common scenario and one in which we need to change your estate plan, as we want to make sure no one is accidentally cut out of your estate by reason of being born after you created your estate plan.

2.  You have created significantly more wealth since your initial estate plan.  This is a good problem to have, but one in which we need to make sure your estate plan still accounts for having a larger estate.  Chances are it doesn’t.

3.  We have a family member with special needs.  Means tested benefits such as Medicaid and Social Security can be lost if a child or other designated beneficiary has special needs but receives an inheritance which disqualifies them from the benefits.  The fix for that is called a Special Needs Trust.  If you have a beneficiary who has special needs, you need to review your existing estate plan to make sure the disability they have is properly planned for and incorporated into your estate plan.

4.   You have since divorced.  Statistically, half of the marriages in this country end up in divorce.  So there are a lot of broken estate plans sitting around.  There are also beneficiary designations which need to be changed.

5.  The people you named to be in charge are no longer in good health or you have lost touch.  Twenty and thirty year old estate plans often run into this problem.  If you created an estate plan that named your good friends as the guardians of your children or the executors of your estate and for whatever reason you are no longer good friends with those people, it’s time to make a change.  Maybe Aunt Phyllis is too old to be burdened with serving as your durable power of attorney.  Maybe your brother Greg, who used to be a bachelor with plenty of free time, can no longer serve as the trustee of your kid’s trust because he has kids of his own.  All of these scenarios are common and a major cause of needed changes to an estate plan.

Whatever the reason, it is important that your estate plan changes as your needs changes.  Our office will ordinarily review estate plans for free and can usually do so after reviewing the existing documents and a consultation.

What are the fees for probate in Missouri?

What are the fees for probate in Missouri?

Probate involves several types of fees and costs, which fall primarily into four categories.

First is a bond premium.  The probate estate may have to pay for a bond for the personal representative (executor) to guarantee they will properly administer the estate.  This requirement can be waived, but if not it is one of the costs of probate in Missouri.

Second is the cost of publication.  A probate estate must publish notice to creditors announcing that an estate has been opened and that they have only so much time to make a claim against the estate.

Third are court costs.  Every estate must pay costs based upon the size of the estate being administered in probate.

Finally, the largest category of expenses and fees for probate in Missouri are a personal representative’s commission and attorney fees.  Missouri law provides a minimum fee schedule for each, which is based upon the size of the estate.  Compensation higher than these minimum amounts may be approved by the court or by consent of all distributees.

The fees are:

5 percent of the first $5,000

4 percent of the next $20,000

3 percent of the next $75,000

2.75 percent of the next $300,000

2.5 percent of the next $600,000 and

2 percent of everything more than a million

Now, you can start to see how expensive probate can get with this example…

Mary, a widow, dies with a will and an estate of $500,000.  Her son, Rich, is named the executor and since the matter is so complicated Rich hires Dave the Attorney to handle the matter in probate.  Now, based on the above, Rich AND Dave are each entitled to the following commissions:

$250 + $800 + $2,250 + $8,250 + $2,500 = $14,050 EACH for a total of $28,100, which does not include the cost of a bond, publication or court costs.

Now you can see why avoiding probate is a great idea, just on cost alone.  Not to mention the time, energy and aggravation of having everything in the estate up in the air for at least six months to more likely a year, if not longer.

The easiest and best way to avoid probate is to set up a revocable living trust.

money and probate