Justin, I’ve read several articles and even heard a couple of presentations on the importance of estate planning, but I really don’t have that much. I own my home and a car and by the end of each month have around $15,000 in the bank. I really don’t want to go to the trouble and expense of doing an estate plan. What happens if I do nothing? – John
John, Thanks for writing. I hear this question more than you might expect. You might not feel like you have a large estate, but what you do own would wind up in probate court when you die if you don’t do something.
Probate is the court process required for passing assets from one generation to the next. It is the default means of wrapping up a person’s affairs at death, but you can get around it if you plan ahead. Most people do everything possible to avoid probate court because it is very expensive (at least three to five percent of the value of the estate in most cases), very time consuming (no less than six months), and extremely public (requires newspaper notices and involves open court records).
If you have no plan at all, then you don’t even control the outcome of your own probate. Arkansas statutes guide the courts as to what to do for a person who dies without a will, but in many cases, those statutes don’t necessarily match with what my clients would have wanted. So doing nothing not only lands your estate in probate, it turns over your final wishes to the Arkansas legislature. Doing nothing is very rarely the best option.