Current:Home > MyFastexy Exchange|Inheritance on hold? Most Americans don't understand the time and expense of probate -ChatGPT 說:
Fastexy Exchange|Inheritance on hold? Most Americans don't understand the time and expense of probate
Fastexy Exchange View
Date:2025-04-10 15:32:28
Nothing is Fastexy Exchangecertain, it is said, but death and taxes.
Yet, many Americans know surprisingly little about the legal process that follows a loved one’s death.
A new report, titled The State of Probate in America, finds many Americans badly misinformed about basic facts of probate. Drawing from a representative survey of 1,000 adults, the report found:
◾ More than half of Americans have no idea what probate costs.
◾ Less than half of us understand that inheritance is not automatic.
◾ Only 2% of respondents know how long it takes to settle an estate.
The findings come from a study released this month by Trust & Will, a digital estate-planning platform.
The report suggests not many Americans fully comprehend the time and expense involved in probate – or its necessity.
“I think one of the most common misconceptions is that probate isn’t a big deal,” said Kelsey Simasko, an elder law attorney in Detroit.
It is. The average probate takes about 20 months, Trust & Will reports. But only 2% of survey respondents seemed to grasp that timeline.
“This is not a few weeks. This is months, guaranteed,” said Mitch Mitchell, product counsel at Trust & Will. “It is a full-time job when you take it on.”
Americans have no idea how much probate costs
More than half of survey respondents said they have no idea how much probate costs, and only 4% believed it would cost more than $10,000.
Probate typically costs 3% to 7% of the estate’s value, Trust & Will says. For an estate worth $500,000, costs might range from $15,000 to $35,000.
“I’ve rarely seen people overestimate the expense,” said Jonathan Swanburg, a certified financial planner in Houston.
Overall, more than half of survey respondents conceded that they don’t fully understand probate. Even so, 52% said they know it will be difficult.
“They tend to be afraid of it because they’ve heard horror stories,” said Seth Mullikin, a certified financial planner in Charlotte, North Carolina.
Probate fear could seed confusion amid great wealth transfer
That fear could seed confusion in years to come.
With baby boomers reaching retirement and controlling roughly half of the wealth in America, researchers expect an unprecedented generational wealth transfer over the next 20 years. As much as $84 trillion could change hands.
Much of the money will go to millennials, who were born between 1981 and 1996. And many of them are unprepared.
In a companion report, Trust & Will found that one-third of millennials do not know if their parents have an estate plan. Among other findings:
◾ Only 58% of millennials have discussed estate planning with older relatives.
◾ 62% of millennials have no will or trust of their own.
Estate-planning experts cite two big reasons why we don’t know more about the probate process in general, and our own family’s estate plans in particular.
Many people only experience the full sweep of probate upon the death of their last surviving parent. The death of a first parent in a married couple can be relatively simple, at least from a probate perspective.
“You are probably only going through this process once,” said Colin Day, a certified financial planner in St. Louis.
'It's an uncomfortable conversation'
Second, many adult children find it agonizing to discuss death and inheritance with an aging parent.
“It’s an uncomfortable conversation,” Mitchell said.
But it’s an important conversation. Probate laws vary by state and within some states.
“We have 254 counties here in Texas,” Mitchell said. “There are at least 254 different ways of doing probate because each judge gets to decide how they want the forms to look.”
State laws differ, too, on what happens if you die without a will. And that scenario is becoming more common.
The share of over 70 households with wills or trusts has been in steady decline, according to the Center for Retirement Research at Boston College. Between 2000 and 2020, that share dropped from 73% to 64%.
In a will or trust, a person instructs how to distribute property and other assets upon their death. When someone dies without a will, the courts take over.
But probate laws vary, and it can be hard to predict who gets what.
If a New York resident dies intestate, leaving a spouse and their biological children, the spouse inherits the first $50,000 of the estate plus half of the balance, and the rest goes to the children, according to an analysis by Trust & Will.
In Florida, under the same scenario, the spouse gets everything.
Here are some expert tips for anyone who is befuddled about how probate works, or afraid to broach estate plans with loved ones.
Write an estate plan
Retirement experts say most adults should have a will as part of a larger estate plan, which dictates not only what happens to our assets after death, but also who will manage our affairs in an emergency while we are alive.
Consider hiring an attorney
Many experts say you should prepare an estate plan with an attorney: Estate plans are complicated, and you don’t want to make mistakes.
Other experts say it is fine to prepare a will without an attorney, especially if cost is an issue: Having a will, they say, is better than not having one.
An online estate planning service will generate a will for around $160, according to the National Council on Aging. The nonprofit offers an online guide.
Talk about your will
Many adult children wince at the thought of approaching their parents to ask who will inherit what.
For that reason, experts say, aging parents should start the conversation themselves.
“It’s probably a lot more comfortable to come from the older generation,” said Harry Margolis, an estate planning and elder law attorney in Boston.
If you have multiple children with busy lives, Margolis said, gather them together on Zoom.
Name beneficiaries
Investment accounts and life insurance policies often require you to name beneficiaries, the loved ones who will get the money upon your death.
For many of us, beneficiary designations function as an estate plan: they’re legally binding and dictate what happens to a large portion of your assets.
Naming beneficiaries now can greatly simplify the probate process later, or can help your loved ones avoid it altogether, experts say.
Where's the inheritance?Why fewer older Americans are writing wills or estate planning
Prepare an estate-planning file
When you die, you leave a tangle of utility bills, bank accounts, passwords and pins, all for your loved ones to unravel.
Create a file, on paper or your computer, and begin to assemble that information now, from your Netflix password to the last known location of your hide-a-key. Update the file as needed.
“I call it a treasure map,” Simasko said. “What you have; where it’s at.”
veryGood! (68)
Related
- Buckingham Palace staff under investigation for 'bar brawl'
- 'Wait Wait' for September 9, 2023: With Not My Job guest Martinus Evans
- As Jacksonville shooting victims are eulogized, advocates call attention to anti-Black hate crimes
- Amazon to require some authors to disclose the use of AI material
- See you latte: Starbucks plans to cut 30% of its menu
- Stassi Schroeder Gives Birth, Welcomes Baby No. 2 With Beau Clark
- Two men questioned in Lebanon at Turkey’s request over 2019 escape of former Nissan tycoon Ghosn
- Mysterious golden egg found 2 miles deep on ocean floor off Alaska — and scientists still don't know what it is
- Are Instagram, Facebook and WhatsApp down? Meta says most issues resolved after outages
- A concerned citizen reported a mass killing at a British seaside café. Police found a yoga class.
Ranking
- Louvre will undergo expansion and restoration project, Macron says
- EXPLAINER: Challenges from intense summer heat raise questions about Texas power grid’s reliability
- Team USA loses to Germany 113-111 in FIBA World Cup semifinals
- Why we love Bards Alley Bookshop: 'Curated literature and whimsical expressions of life'
- See you latte: Starbucks plans to cut 30% of its menu
- Mysterious golden egg found 2 miles deep on ocean floor off Alaska — and scientists still don't know what it is
- Powerful ethnic militia in Myanmar repatriates 1,200 Chinese suspected of involvement in cybercrime
- Nationals owner Mark Lerner disputes reports about Stephen Strasburg's planned retirement
Recommendation
Why we love Bear Pond Books, a ski town bookstore with a French bulldog 'Staff Pup'
Benedict Arnold burned a Connecticut city. Centuries later, residents get payback in fiery festival
The world is still falling short on limiting climate change, according to U.N. report
Prominent activist’s son convicted of storming Capitol and invading Senate floor in Jan. 6 riot
Brianna LaPaglia Reveals The Meaning Behind Her "Chickenfry" Nickname
Hundreds of Pride activists march in Serbia despite hate messages sent by far-right officials
Stellantis offers 14.5% pay increase to UAW workers in latest contract negotiation talks
'Not one child should be unaccounted for:' After Maui wildfires, school enrollment suffers