One question I get asked a lot is; “Do I even need a Trust? I already have a Will.”  The simple answer is yes, yea, absolutely, for sure, yep, indubitably, and uh huh.  The reason is, a Will will not keep your Estate out of Probate.   

People seem to fall into two categories when it comes to Probate: those who don’t know anything about it and those who have horror stories about it.  If you are reading this article I am willing to guess you have been fortunate enough to not have been a part of a Probate before.  So let me explain what Probate is.  

Probate is the legal process by which a person’s estate is assessed, creditor are paid, and your estate is divided and distributed to your heirs.  If you have a Will the court will use the Will to guide this distribution.  Though probate serves an important legal function, I cannot state this emphatically enough; Probate is something that should be avoided whenever possible.  Here are some reasons why: 

Cost

The cost of Probate is set by statute as a percentage of the value of your estate.  For an estate of $500,000, which is a very modest estate, the cost is nearly $27,000! That is $13,000 in attorney fees, $13,000 in executor fees, and $870 in petition and filing fees, plus other court costs.  This is money your family will lose, if your estate goes to Probate.

Time

 Probate can take between 18 and 24 months in Ventura County. During that period your heirs do not have access to accounts in probate.  This means for 18 to 24 months someone else may need to pay your mortgage, property taxes, water and electric bills as well as funeral expenses.  This is a huge burden on your grieving family.

Multi-state estate

Do you own a time share some other property in another state?  If so, those assets may need to go through probate in that state.  Which means more attorney fees, executor fees, court costs, and time.

Family Feuds

Many of the horror stories surrounding Probate involve fights within families.  The passing of a loved one is a stressful and emotional time.  Adding the pressures caused by Probate may create fractures in a family that could take years to mend.

Surviving Spouse, especially if remarried

A common misconception is that upon your death your spouse will simply get all your assets.  While this is true of assets titled in both spouses names this does not apply to any assets held by you alone, or by you and another person.  This is exceedingly common in second marriages, where assets purchased after the first marriage but before the second are titled in only one spouse’s name, or a spouse and a third party like a son or daughter, friend, or other relative.  In these cases the asset may end up going to the third party, or the court may order it sold and the proceeds divided.  

So how do you avoid these pains?

The most efficient way to avoid probate is through a well written and funded Living Trust.  This will prevent assets protected by the trust from going through Probate, while at the same time a Trust can also provide some tax benefits to you heirs.