Americans collectively spend more than 2 billion dollars a year on probate cases, with more than half being paid in attorney’s fees. But despite the large size of this annual spend, fewer people are actually using probate as a means of contesting a will, according to the Financial Services Industry Group at Dykema.
In states such as Ohio, the number of probate cases has declined; down over ten percent since 2005. In places like Texas and other states with similar laws, where a person who is deceased, left no standing will, and was worth less than $75,000 in assets, heirs are turning to the use of a small estates affidavit.
More and more states are adopting legislation that recognizes the validity of POA (Power of Attorney) in another State.
While the facts may seem as though probate matters are trending against attorneys, the exact opposite is true. Americans are getting smarter about probate matters and savvier in terms of using Power of Attorney, Living Wills, and others similar devices in order to avoid a probate dispute.
This has freed up the courts to hear more serious matters in probate and allows for attorneys to function more freely in probate cases, unencumbered by what many people think of as “petty squabbles” over relatively low dollar amounts in terms of assets.
For those unfamiliar with the term “small estate affidavit”, this is a legal document that shortens the standard probate process significantly, and is primarily used in cases where the deceased leaves a relatively small amount of dollar value in terms of assets.
In Texas, the limit for small estate affidavits is – as mentioned above - $75,000. In Illinois, the limit is set at $100,000, while in California, the small estate limit is set at $150,000. If you’re wondering what your state’s small estate limit is, you can find that here ==> It should be noted that in most small estate cases, the transfer of ownership of real estate is not allowed. Make sure you know your state’s probate laws before you decided to proceed with your own case.
One probate trend that has held firm is the reality that a significant number of Americans don’t have a standard will, let alone a standing power of attorney or living will. According to the AARP, almost half of Americans over the age of 65 do not have a will in place. For those under the age of retirement, fully 55% of Americans do not have an estate plan or a will. In the case of minorities, that figure ramps up to 68% without an end-of-life plan or standing will.
In the realm of Power of Attorney, many states such as Texas, have adopted legislation recognizing the validity of POAs enacted in other states. For instance, a Power of Attorney Declaration signed and enacted in Nevada will now be recognized in Texas as valid, without the need to get into more complex probate matters or disputes. This also has streamlined the probate process, and allows for the resolution of such matters in a much more timely fashion. While this may seem to be legislation designed to shorten the dispute process (and it is), it would be much more accurate to say these new legislative enactments protect the individual from large banking institutions that claim they are owed debt.
Many people, when they think of probate law, tend to assume they are matters of living children squabbling over a deceased parent’s assets. While this is certainly true in some cases, it is more often the case that a financial institution is seeking to have debts paid and thus get involved in probate matters.
If you do not have a living will or end-of-life plan in place to protect your loved one, consider doing so at your earliest opportunity. A little hassle now will most likely avoid a much larger hassle down the road.