Is There Any Way To Avoid Probate?
Yes, most states have a summary procedure whereby probate is avoided if the value of your assets is less than a certain value, or if the only heir or beneficiary is your spouse. For example, in California , if your assets amount to less than $100,000, probate can be avoided entirely. Property held in joint tenancy or with a beneficiary designation is not counted toward this $100,000. Also, no more than $10,000 of this $100,000 can be held in real estate. Otherwise, you will need to prepare a Trust in order for your assets to be distributed outside of probate court. It is in your best interest to consult with an attorney to minimize the chance of legal complications in trying to avoid probate.
Should You Avoid Probate?
The living trust is often marketed as a vehicle that allows you to "avoid probate" upon your death. Probate is the courtsupervised process of transferring property at death pursuant to the terms of a will. Many types of property routinely pass outside of the probate process. These include:
· life insurance or retirement plan proceeds which pass to a named beneficiary rather than your estate
· real estate or bank or brokerage accounts held in joint names with right of survivorship
While it is true that the property passing under the terms of a living trust upon the death of the maker of the trust will "avoid probate," it should be noted that there may or may not be actual value in that result. Probate laws are different in every state. In some states there are statutorily mandated court or attorney fees while in others those fees may be minimal. Many states have expedited or simplified court proceedings that are efficient and inexpensive for small or simple estates. A properly drafted will in many states can eliminate some of the steps otherwise required in the probate proceedings. In addition much of the delay and red tape customarily associated with probate is a result of the tax laws and tax filing requirements, which cannot be eliminated through a living trust and the avoidance of probate.
A living trust can almost never totally avoid probate and a simple will is needed to "pour over" to the trust any property that has not been transferred to the trust during life.
Property that passes at death through a revocable living trust must first be transferred to the trust, administered by a trustee who may or may not charge fees, and then transferred out of the trust to the beneficiary. These costs and the costs associated with tax filings are often ignored by living trust marketers. There may be other costs as well depending upon the jurisdiction, such as real estate transfer taxes. The comparison of cost between probate and a living trust should be made on a case by case basis.
Speak to an Experienced Estate Planning Attorney Today
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified estate planning lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local estate planning attorney to discuss your specific legal situation.
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