The Perils of Probate Dr T. A. Makoni
When someone dies the Estate Duty Act Ch 23:03 requires a process to establish the estate or property of the deceased in order to levy a duty or tax at death. A fact of life is if one does not order his affairs well then one is taxed both in life and at death. In this posting we discuss ways of avoiding the torturous probate process.
Probate is a legal process where your named executor goes before a court to:
- Identify and catalog all of your property
- Appraise the property, and pays all debts and taxes
- Prove that your will is valid and legal, and
- Distribute the property to your heirs as the will instructs.
The Process Is:
1. Costly and Time-Consuming
Probate is neither cheap nor quick. It requires a hearing in over-burdened courts – the process can tie up your property for a year or more. Your loved ones will not get the property you intended for them until the process is complete.
Probate is usually handled by attorneys, whose fees and court costs can eat up a significant chunk of your estate’s value.
2. Provides unnecessary publicity
Everything that comes before a judge or Master of High Court is public record, as is true with your estate. A will is a very personal document, and may reveal private family and financial issues and concerns. But once it is entered into the court record, it becomes public, and can be inspected by anyone. E.g. Zvobgo and Tungamirai’s Estates have played up in the public arena.
3. The Lawyers, Not Your Family, Are the Winners
Many lawyers don’t explain fully the probate process when preparing your will, because probate usually represents good profit for them with little effort. To do probate, attorneys often charge as much as permitted by law, but most of the probate work is actually clerical and can be accomplished by paralegals and clerks. And unfortunately, you’re no longer around to do anything about it.
4. Is Your Estate Liquid?
Because probate costs can add up quickly, even before a single distribution to heirs is made, the estate must pay for these costs. However, if your estate consists of many illiquid assets, such as real property, or long-term bonds, these assets will have to be sold to pay for probate.
Selling these types of items involves appraisal fees and additional delays, not to mention the fact that property you may have intended for children may be sold at below-market value to pay for probate.
5. Avoid Probate Altogether
Living trusts allow you to avoid probate completely. When you set up a living trust, the trust is considered separate and apart from you. If you fund a trust, the trust (not you) owns your property. Therefore, the trust can continue even when you pass way.
The probate courts have no jurisdiction over property owned by a living trust. After your death, property in the trust can be distributed — privately and easily — to family or friends with no probate.
Another option is to name your heirs as beneficiaries on certain products like life insurance. The proceeds from the account are distributed on the owner’s death immediately to the named individual(s). Again, the courts have no jurisdiction over these types of distributions.