PART I: PRIVACY MATTERS: WHAT HAPPENS TO YOUR PRIVACY WHEN YOU WILL IS PROBATED?

When people think about estate planning, they generally focus on who will receive their assets and how those assets will be distributed. One consideration that is sometimes overlooked is privacy.

A Will does not remain a private document after death. If a Will is admitted to probate, it is filed with the court and becomes part of the court record. Depending upon the circumstances, other documents filed in connection with the probate proceeding may also become publicly available.

For some families, this is not a significant concern. For others, particularly those who would prefer to keep their financial and family affairs private, it is something worth considering when deciding how an estate plan should be structured.

What Information Can Become Public?

When probated, the Will itself becomes part of the court record. As a result, someone reviewing the Will may be able to see who the beneficiaries are, what specific gifts have been made, how the estate is being distributed and whether particular family members have been omitted.

A recent example is the estate of actor Gene Hackman. Following his death, his Will became public and generated considerable news coverage, including discussion about his wife and his three children. His estate plan, however, also included a Revocable Trust. While the Will became available to the public, the Trust did not, and the ultimate beneficiaries and dispositive provisions of the Trust have remained private.

You do not have to be a celebrity for the same distinction to matter. Once a Will is filed for probate, its contents do not remain a private family matter.

The probate proceeding itself may also disclose information about the decedent’s family. In New York, a probate petition identifies the decedent’s distributees (in other words, the individuals who would inherit if there were no Will) and provides certain information about them. This means that family relationships may become part of the court record even when those individuals are not beneficiaries under the Will.

Depending upon the circumstances of the estate, additional financial information may also become part of the record. And if there is a dispute concerning the Will or the administration of the estate, court filings can disclose considerably more about the decedent’s assets, family relationships and the issues in dispute.

Why Does This Matter?

There is nothing unusual about any of this. Probate is a court proceeding, and court proceedings involve records that are available to the public. But many people sign a Will without realizing that a document they regard as a private expression of their wishes may eventually become a public document.

This can be particularly important for individuals who own a business, have significant assets, have complicated family circumstances or simply place a high value on keeping their personal and financial affairs private.

Privacy is not, by itself, a reason that everyone needs a Revocable Trust. But it is one of the factors that should be considered when deciding whether an estate plan should rely primarily upon a Will or whether a Revocable Trust may be appropriate.

In Part II, we will discuss how a properly funded Revocable Trust can allow assets to pass without probate and provide a greater degree of privacy for you and your family.