This article is not for you if:
You have nothing; or
You have no one to leave anything to; or
You don’t care whatever happens to your money
and real estate and stuff after you die; or
You like the idea of paying money (lots of money)
to lawyers; or
You have a properly funded living trust.
That leaves lots of you.
If you die leaving assets in California in your name alone, and those assets have an aggregate gross value of over $100,000, there will be a probate. Probate is a legal procedure that takes eight months to a year, or longer, costs thousands of dollars, primarily in legal fees, is a matter of public record, and is a general pain in the neck and other vital organs.
Among the costs of probate are court filing fees, paid when the first petition for probate is filed. Now the cost of probate has gone up again: As of January, 2009, additional fees ($350 each) are required upon the filing of each additional petition – both for each annual accounting and for the final account and request for distribution.
Is this trip necessary? Not necessarily. If, instead of holding title to assets in your name alone, you hold title as trustee of a revocable living trust, at your death your successor trustee automatically takes control of your assets. This successor trustee may then pay your bills, compromise claims against your estate, and distribute the net assets to your beneficiaries, in accordance with your wishes, without the necessity of probate proceedings or court involvement.
Granted, times are tough for many people right now. Real estate prices are down. Stock prices are down. Our net worth may well be far less than it seemed to be a year ago. Nevertheless, considering how much a probate can cost, the preparation of a living trust and related estate planning documents is still a cost-effective way to carry out your after-life wishes for the disposition of your assets.
Estate planning won’t make you any money, but typically can save your loved ones thousands of dollars in probate expenses and, in some cases, in Federal estate taxes.
As one lawyer recently asked a prospective trust client, “Who do you love more, your children or mine?”
Jerry Kessler practices law in Santa Clarita. He can be reached at 661-255-1001.