Probate avoidance is a key feature of many people’s estate plans. In this blog post, we take a deeper dive into one of the perils of probate: lack of privacy. We discuss the potential negative impacts on your family, beneficiaries and your personal representative.
Naturally, most people want their personal family and financial affairs to stay private. But if you have a will (vs. a trust) as your main estate planning strategy, the will must be filed with the probate court when you pass away. Once filed, it and many associated documents become a matter of public record, and much of your privacy vanishes. Anyone and everyone who might be interested in your affairs can then access your information and pry into your business. That includes nosy friends, neighbors, relatives, even your children’s former spouses!
The information the public can view is not limited only to the identity of your beneficiaries and what they are inheriting. Filed documents may also reveal who you are cutting out of your estate. They may contain clauses that reveal your beneficiary has a drug problem or other personal problems. Tax planning provisions in your will may reveal the value of your assets. (Thankfully, Florida does have rules limiting the amount of information about minors that can be made public in probate records.)
Is it possible to seal a probate record? Theoretically, yes, but it is a complicated process that requires an attorney. It is rarely an option, except in the most high profile of cases. And as you can surmise if you follow our blog, even celebrities’ probate cases are often left unsealed.
To give you an idea of some of the specific intrusions and inconveniences your personal representative and beneficiaries may experience because of this lack of privacy, read on.
1. Unsolicited Advertisements
Do a google search for “probate leads” and you will immediately see that selling and buying probate information is very big business. Numerous companies assemble and sell listings of probate cases, referenced by state and county. Probate cases constitute the basis for many a marketing campaign. This means that your beneficiaries and personal representative will likely receive a barrage of unsolicited offers and inquiries once the probate file is opened. Once a company is aware that someone might be getting an inheritance, they will try to sell the beneficiary a huge range of products and services: cars, home improvements, as well as estate-related services such as movers, estate liquidators, housecleaning, etc. For those you leave behind, these solicitations may be a nuisance at best, emotionally harrowing at worst.
2. Real Estate Buyers
Probate leads have a particularly strong allure for real estate brokers. It is not illegal or even technically deceptive for a potential buyer to reach out to your personal representative or beneficiary. That said, potential buyers are well aware that people who inherit property following a loved one’s death may be particularly vulnerable. Your beneficiaries and personal representative may be confused, bereaved and overwhelmed. They may be prone to sell property for less than it’s worth, and faster than they otherwise would. Here is a statement from one website that offers probate marketing lists: A probate lead is potential seller who has inherited property after the passing of a relative. Oftentimes these properties will be out of state from the new owner and causing the sale to happen quickly. In addition because of the suddenness of the inheritance, new owners will likely be unprepared for the financial responsibility of taking care of the property. According to our research 40% of homes newly listed in probate will sell within 6 months.
3. Cash Advance Offers
Probate takes time. Lots of time. The average formal probate administration in Florida is somewhere between six months and one year, and that’s assuming no complications arise. Beneficiaries can wait months or sometimes even years to get their inheritance. Cash advance companies know that some beneficiaries may be counting on that money. Beneficiaries may need the inheritance or may just be impatient for it. These companies will contact beneficiaries and offer them a portion of their inheritance up front, for a guarantee that the company gets the full inheritance when probate is finished, plus a fee. Thus, the inheritance you have left effectively becomes collateral for a cash advance to the beneficiary.
4. An Advantage For Disgruntled Heirs
Do you plan to cut someone out of your will who you suspect may challenge your estate – an estranged adult child, say? If that is your situation, probate offers the challenger an open door into the process. A disgruntled heir will be able to get details about your dispositions and assets from the local probate court, and can use that information to bolster an estate challenge. Defending an estate challenge will drain money from your estate, and create delays and hassles for your intended beneficiaries.
5. Identity Theft
Probate is a great opportunity for identity thieves to steal the identity of the deceased, obtaining credit and making purchases in the decedent’s name. The theft can occur even before the credit agencies know the person has died. Your personal representative will have to deal with this mess if it occurs, and will have to prove that this activity occurred after your death. That means more expense and hassle.
Strategies exist that can keep your estate out of probate, such as creating a living trust. We can help you design an estate plan that prioritizes probate avoidance and protects your family’s privacy. If you want to keep your estate out of probate for privacy reasons or for any of the other benefits a living trust can confer, call our attorneys for a consultation at (561) 625-1100.
