LEARN HOW MAKING A REVOCABLE LIVING TRUST CAN AVOID PROBATE AND SAVE THOUSANDAS OF DOLLARS IN UNNECESSARY EXPENSES IN THE PROCESS

If you want ensure that your assets pass to your beneficiaries uncontested, in a timely manner and would also like to save your family thousands of dollars in unnecessary expenses at the same time, then you really need to avoid probate!!

Why do I need to avoid Probate? It's an age-old process so what's wrong with it?

Probate has come to mean not just proving the validity of a Last Will and Testament but the entire administrative process involving the passing of an owner's legal title to property to his beneficiaries after his death. The deceased's property is inventoried and creditors are identified and paid after the payment is made to the estate's attorney, executor and tax entities. Assuming that the Last Will & Testament is not contested, the probate process shouldn't take too long. However, if there are any complications, probate could end up taking years.

Let's take a quick look at some of the typical problems with probate:

(a) Probate can often cost up to $50,000!

In most states, probate fees are charged as a percentage of the "gross" value of an estate. These fees can typically range from 3.8% ( Utah) to 11% ( Alaska).

Probate fees are calculated on the gross value of a decedent's estate. So, if a home had a market value of say $1 million and a mortgage of $900,000, probate fees will be calculated on the $1million even though the net asset value is only $100,000! This can result in a gross inheritance of 100,000 with probate fees of $46,000 and this doesn't include filing fees and other costs. With property values at record highs, you don't have to be wealthy to incur substantially high probate fees.

(b) Probate takes too long!

Assuming that all the appropriate documents are in order, probate should, on average, take a year or so. However, this rarely occurs and, in practice, it can take between eighteen months to five years to settle an estate. For all practical purposes, the estate is frozen during that period and beneficiaries have to wait until probate is over before they can receive their inheritance.

(c) Probate creates unwanted publicity.

Everything in probate court is a matter of public record and details of a deceased person's assets, their creditors, as well as details of the persons who have received his assets and other family issues are open for daily inspection by the public!

(d) Probate allows Wills to be easily contested

Beneficiaries and heirs can become upset with their inheritance under a Legal Will and often hire attorneys to contest the Last Will. Because a Legal Will is on the public record, an attorney can easily evaluate the likelihood of a successful challenge to its validity or its terms before deciding whether or not to take a case. An attorney can therefore, and at relatively little cost, advise a client quite quickly as to whether they have a plausible cause of action. Because the likelihood of making an unsuccessful claim is substantially reduced, heirs and beneficiaries are much more likely to successfully make a claim.

HOW TO AVOID PROBATE?

Now that you know why you should avoid probate, let me show you the most effective way of doing it.

A Revocable Living Trust is an excellent tool for solving a number of issues confronting individuals and families today, including the avoidance of probate, the management of property during incapacity, the protection of property for beneficiaries who can't handle money on their own, protection from disgruntled heirs, the elimination or minimization of federal estate taxes and state death taxes, and the assurance that personal affairs will remain private.

A Revocable Living Trust is a type of trust created for the purpose of holding ownership of an individual's assets during that person's lifetime, and for distributing those assets after their death.

A Living Trust is quite easy to establish and operate. To create a basic Living Trust, you make a document called a declaration of trust, which is similar to a Last Will and Testament. You then name yourself as trustee and transfer whatever assets or property you want into that trust. Because you are named as the trustee, you maintain full control over your assets just as you did before you transferred the assets. You can still do whatever you wish to with them - manage them, sell them, or even give them away. The trust does not become effective until you die or become incapacitated.

After you, or you and your spouse (in the case of a joint trust) pass away, the trust identifies the person who will act as successor trustee. The successor trustee -- the person you appoint to handle the trust after your death -- simply transfers ownership of the assets in the trust to the beneficiaries named in the trust. In many cases, the whole process takes only a few weeks, and there are no lawyer or court fees to pay. When all of the property has been transferred to the beneficiaries, the Living Trust ceases to exist.

ADVANTAGES OF USING A LIVING TRUST

You will be able to Avoid Probate and the excessive legal fees and other expenses that go with it.

With a Revocable Living Trust, your assets will go directly to your beneficiaries after your death. Because the assets are owned by the Trust, they are not subject to probate administration, saving the money normally paid as probate administration expenses. There will be no probate attorneys fees or court costs.

You avoid probate and the drawn out distribution of your assets!

If you avoid probate, the courts maintain will have no control over the Trust's assets, and therefore cannot tie up the assets in a lengthy (and costly) probate process. The Trustee simply distributes assets to named heirs free from the probate process, but only if those assets have actually been placed inside the Trust.

Avoid unwanted publicity.

Your Revocable Living Trust is not open to inspection by the public and, as a result, no-one becomes aware of what assets you have, who you passed those assets to, who you owed monies to and what specific family arrangements you may have had in place.

Reduce the likelihood of disgruntled heirs contesting your wishes.

With a private family trust, the contents are not publicly known. Attorneys are less likely to spend their own time and money pursuing a lawsuit with unknown probabilities of success.

Prevents court control of your assets when if you ever become incompetent.

A growing number of older citizens are putting their assets into a Living Trust because they want to avoid being placed under a court-appointed guardian if they become unable to manage their affairs. If you become disabled or are unable to manage your estate, your Living Trust avoids the need for a court-mandated conservatorship. The successor trustee you have named in the trust will manage your affairs without government interference and expense. The trustee occupies a position of trust and confidence and is subject to strict responsibilities. This is usually higher standard of performance than one who is dealing with his or her own property. Without the express written permission, the trustee cannot use trust property for any other reasons than those specified in the trust agreement and must hold the trust property solely for the benefit of the beneficiaries.

Other Advantages: -

 

A Living Trust can also provide for the care, support and education of your children by turning over assets to them at an age chosen by you. Even insurance proceeds can be paid to the trust so your successor trustee can manage them for the benefit of your family.


You can avoid statutory restrictions on bequests of property. You can reduce or eliminate estate taxes.

Revocable Living Trusts are inexpensive and easy for you to set up and maintain.

You can revoke or amend your Living Trust at any time!

You can prevents court control of inheritances received by your children and appoint someone to manage property left to them.

You can restrict and control how your estate is managed and even spent after your death.

You will have the peace of mind of knowing that you have avoided probate and the possibility of having your assets frozen for years in the probate process!!!

So, as you can see, a Revocable Living Trust is one of the best ways for you to provide for the special needs of your family AND ensure that your estate is not depleted through costly and drawn out probate proceedings. Just call your lawyer to find out more or visit http://www.global-wills.com/trusts.html.

 

Martin O'Donoghue

Director and Corporate Counsel

Global-Wills.com

martin@global-wills.com

Martin O'Donoghue, lawyer and co-founder of http://www.global-wills.com, has helped thousands of people avoid probate through the use of Revocable Living Trust Agreements. Global-Wills.com helps people to strategically secure the financial future of both them and their family through the provision of international estate planning and asset protection products, forms, resources and information.

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