Dues of Dying: Why death without a plan costs more money, time

(Springfield, MO) InvestigateTV — Terry Miller’s sons weren’t ready to say goodbye to their father, a fun-loving fisherman with a strong moral code. But they were even less prepared for what followed – years of financial headaches and probate court nightmares.

Many people who die with an asset – a house, a car, a savings account – is forced into a local legal proceeding whereby a judge oversees the distribution of those assets and essentially forever closes the deceased’s financial life.

The process is designed to protect those assets from theft or greedy relatives or friends with no legal right to any of the deceased person’s money or property. But probate court rules and regulations are tedious, cumbersome, slow and often leave bills unpaid. It also can harm the surviving spouse when electric bills or car payments go unpaid.

Probate laws vary widely from state to state and also can leave estates vulnerable to identity theft, InvestigateTV found.

Terry Miller’s sons believed his estate would be easily settled. He lived a modest, middle-class life and, as a planner, had taken steps to prepare for his passing.

“Once we find the will, you know this can all be sorted out,” his son Joe said. “I knew that he had made my brother the executor of his estate, because my brother and I talked about that.”

Despite Terry’s careful planning, Joe and his brother soon found themselves caught in a legal dilemma. All of Terry’s assets, including his home and bank accounts, were immediately frozen after his death. Nothing could be accessed. No outstanding bills could be paid.

“I thought lengthy process is a year,” Joe said, referring to the attorneys who told him that probate would take time. “But instead, I found myself entangled in a drawn-out court process I never anticipated.”

Terry’s health started to decline after he had fallen off the back of a truck in 2018. He died on June 26, 2021. He was just 73.

Joe fondly recalls his earliest childhood memories – fishing trips with his dad and a Christmas train that Terry built from plywood. He was a die-hard Kansas City Royals fan and a man with strong values.

“He had such a heart, compassion for kids in other countries that he supported, and he felt compelled to give,” Joe said.

But his grief carries a heavy burden because of the requirements of probate court, as he continues to go through the process.

What Is Probate?

Laure Poche, an estate planning attorney in Louisiana, has dedicated her career to helping families navigate the probate process. She’s encountered many clients who don’t fully understand what probate is or how it works.

“This is the way I explain it to my clients: it’s almost as if an imaginary camera takes a picture of any property titled in the name of that person’s name at the moment of death,” Poche said. “So, upon my death, if real estate is titled in my name, if a bank account is titled in my name, if a brokerage account is titled in my name, states require a court process.”

Probate is the legal procedure that takes place after someone dies, in which a court supervises the distribution of assets to the rightful heirs. During probate, all assets must be located and evaluated. These assets may include:

• Real estate
• Timeshares
• Stocks
• Bonds
• Mutual funds
• CDs
• U.S. savings bonds
• Checking and savings account
• Vehicles

However, unless the deceased has an estate plan that includes a trust, that’s a legal arrangement that governs your wishes for how and when to transfer your assets while you’re still alive. Probate is required in all 50 states. In Louisiana, this process is instead called succession. The process can be lengthy and costly, with fees varying depending on the state and assets owned.

“Some people, if they don’t have the advantage of just knowing, most of the time when people understand that this is a potential problem, they will address it, but many times they don’t know,” Poche said.

The Growing Complexity of Probate

According to estate lawyers like Poche, probate has become more complicated and time-consuming in recent years.

A will is usually a written document that covers the basics of who will be responsible for your children and what should happen to your assets after you are gone, alone, is not enough because it doesn’t prevent probate court.

Assets cannot be released until probate is complete. Banks have grown increasingly cautious, often refusing to release funds without a final court judgment backing the claim.

“These internal [bank] policies have been changed to protect these banks against liability in the screwy world that we’re living today,” Poche said.

Without the proper court documentation, a deceased person’s assets remain out of reach.

InvestigateTV contacted probate lawyers from all 50 states to learn more about the probate process and state-specific regulations. Our research found that the length of probate and the costs involved often depend on both the value of the deceased’s assets and where they lived.

In 25 states, including Alabama, Florida, Colorado, and Kansas, probate typically takes six months to a year. However, in states like California, Georgia, and Maryland, the process can stretch up to two years.

In North Carolina, a straightforward probate process could take seven to 12 months and cost at least 2% of the estate’s value, though that fee could rise as high as 8%.

In California, the probate process is among the lengthiest and most expensive. A middle-class estate there, consisting of assets like a home, investments like bonds or stocks, and personal belongings could cost around $7,000 and take several years.

Factors like the amount of assets, the efficiency of the court system, and family disputes can also contribute to delays in the process.

Account Information Made Public

Craig Parker is an assistant general counsel at Trust & Will, an online estate-planning service, and has been assisting families for over 20 years. He emphasizes the importance of planning ahead and setting up a trust.

“The primary benefit of putting assets into a trust is that it avoids the need to go through probate,” Parker said.

A trust oftentimes allows families to bypass the often lengthy and costly probate process, giving loved ones quicker access to the deceased’s assets and the time to properly grieve.

“If you have a small estate, think about how stressful it’s going to be on people to try to pay the bills, deal with the grief, and handle everything that’s going on,” Parker said.

Attorneys like Parker and Poche point out that the biggest challenges are often faced by middle-class clients, who frequently have to bear the costs and expenses, like paying for funeral expenses or an electricity bill, until the probate proceedings are finalized.

However, it’s not just the process that can catch families by surprise.

A woman from Louisiana discovered that her loved one’s account information was publicly accessible in probate court records.

Skeeter was 100 when she died. Her daughter-in-law fondly recalls her daily routine of attending church. To protect their privacy, InvestigateTV is not identifying the family

“She was a very special lady; she loved her family, and my husband in particular, he was her baby boy,” the daughter-in-law said.

Skeeter had taken steps to ensure that her family wouldn’t bear the burden of probate after her death. However, they weren’t prepared for the fact that all of Skeeter’s financial and personal information would become public record in the court system.

“It’s very surprising that anyone can either Google or just go down to the courthouse or somewhere and find anything,” the daughter-in-law said.

Everything Skeeter owned, including her assets and financial details, became part of the public record.

“Just as we try to keep our lives private, our personal belongings and our affairs should not become public record after our death,” she said.

InvestigateTV found that this is simply part of the process once probate is opened. These public documents disclose everything a person owns, including the balances in checking and savings accounts.

Some examples InvestigateTV found revealed full details of the deceased person’s debts, complete vehicle identification numbers (VINs), and account numbers for health savings accounts (HSAs). These documents also list investments and any outstanding money owed to creditors.

“You could be in China, and you can get on the computer and see every single probate, what all the assets are down to the penny, and where they’re at—the banks, and where they’re located,” said Parker, of Trust & Will.

This information is readily available for cybercriminals to access.

Parker believes the probate process needs a significant overhaul and hopes Congress will intervene to protect Americans’ privacy from the vulnerabilities of the current system.

“I would say the majority of people have no idea until it happens to them,” Parker said.

Trusts are a possible Solution

For families across the country, death is inevitable. That’s why experts encourage people to take action before the unexpected occurs. Creating a will or living trust can protect families from the lengthy and costly probate process.

Lawyers advise consumers to take proactive steps to protect their loved ones by connecting with an estate planning attorney who can guide them through the process.

For people like Joe Miller and Skeeter’s family, the experience of losing a loved one taught them an important lesson.

“Do your family a favor and have all this stuff sorted out, because the last thing your family needs is to go through this chaotic legal process instead of grieving your loss,” Joe Miller said.

Associate Producer Charlie Roth contributed to the research for this report.