Last week Dave and Lauren came into our office because Dave’s mother, Nancy, had recently passed away. As it turns out, Nancy had a Will and left everything to Dave. Since Nancy had taken the time to put a Will together, Dave and Lauren thought they could simply go to her bank, take over her checking account and use it to pay for all the expenses associated with the funeral and other immediate expenses.
Unfortunately, the bank didn’t see it that way and said they couldn’t access the bank account for the next 6 months. Six months? What? Dave and Lauren were in shock!
They thought that since Nancy had a Will in place this would be a simple, straightforward situation to go to the bank and withdraw some funds to cover the funeral and other impending expenses. Imagine their surprise when the bank told them they needed to probate the estate first before they can have access to Nancy’s checking account. And the probate would be a minimum of 6 months.
Unbeknownst to Dave and Lauren, a Will does not avoid probate. It gives direction for her wishes but doesn’t alleviate the need for her estate to go through probate. And in the state of Idaho, there is a 6 month waiting period before funds can be released.
Let’s take a quick look at what “probate” is exactly and why it requires a “waiting period” to access an esate.
The word “Probate” comes from the Latin verb probatum, which roughly translates into “having been proved.” When Nancy’s estate enters probate, Dave and Lauren will have to prove to the court they are the rightful heirs of Nancy’s estate. In the meantime, while they have to wait for everything to clear probate, all expenses will have to come out of Dave and Lauren’s pockets.
To see how probate works, allow me to share a simple example I often use with clients. Let’s say you have a car and you want to transfer a title. If the car is titled as “Husband AND Wife”, both Husband and Wife will have to sign off on the car title if the car is going to be sold. If the Husband happens to have passed away, the Wife legally cannot sell the car since she doesn’t have the Husband’s signature. In this case, the Wife will have to go to court so they can give her the authority to sign the car title for her Husband.
Fortunately for Dave and Lauren, the probate of Nancy’s estate went smoothly. No one contested the Will, which can certainly happen, and after six months Dave and Lauren were able to inherit everything from Nancy.
In Idaho, probate needs to be open a minimum of six months. During this time creditors (and others) can file claims against the estate. In addition, any disinherited heirs are also able to contest the Will.
Once we finished the probate of Nancy’s estate, Dave and Lauren had a completely different perspective on how to protect their assets. Because of this experience, they came back into my office and said, “We do not want to put our children through what we just went through with Nancy. We want to create an Estate Strategy that will protect our assets and our family. And most importantly, we want to avoid probate.”
As we went on to discuss, there are several strategies that can help them avoid what just happened with Dave’s mother Nancy. It starts with and Estate Strategy to uncover the specific needs and wishes of the individual and family. It isn’t a bunch of documents…it is a plan that will get you where you want to be today and in the future. Now you know how to not end up like Nancy’s family and have peace of mind that your wishes will become reality.