An Alternative to Probate

 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 and courts; 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 $150,000.00, there will be a probate. Probate is a legal procedure which takes about 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 and upon the filing of each additional petition, such as each annual accounting and for the final account and request for distribution. There are also publication costs and fees for the Probate Referee (a court-appointed appraiser). There may also be a surety bond premium.
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 these 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 financially challenging for many people. Real estate prices have not yet returned to the highs of prior years. Stock prices fluctuate. Our net worth may well be far less than it seemed to be several years 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 wishes for the distribution of your assets once you are gone. 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.