04 Jan The Best Way to Avoid Probate? Create a Living Trust
Probate is when the court supervises the processes that transfer legal title of property from the estate of the person who has died (the “decedent”) to his or her beneficiaries. Usually, you have to fill out court forms and appear in court to:
- Prove to the Court that the Will is valid (this is usually routine),
- Appoint a legal representative with authority to act on behalf of the decedent,
- Identify and inventory the decedent’s property, and have that property appraised,
- Pay debts and taxes, and
- Distribute the remaining property according to the terms of the Will or to the decedent’s heirs.
Probate a long and tedious process
Probate is generally a long process and can take longer depending on how complicated the estate is. If the deceased left piles of papers to be filed and a paper bag full of receipts, it may take time to sort out the initial things, like gathering assets, filing tax returns, and paying debts. Other situations can cause delays such as a complicated tax situation, many assets to be sold, debt disputes, lawsuits against the estate, or difficulty finding the people who will inherit the estate under a Will or under state law (Beneficiaries).
A lawsuit involving a challenge to a Will may cause long delays. Considering all of these factors, probate can take anywhere from 7–9 months. Some matters have taken decades to resolve. Probate can also be quite costly. When all the costs are added up—and the costs may include appraisal costs, lawyer fees, court costs, plus legal and accounting fees—probate can easily cost from 3–7% of the total estate value, and more.
California is one of a few states that sets statutory attorney fees based on a percentage of the gross estate, even though the net estate (after paying mortgages, debts, and so on) may be considerably smaller and a fee based on a gross estate may be unfair.
The ONLY way to avoid probate is to establish a Living Trust
All items and property placed in a trust goes directly to the successor trustee when the a person passes, completely avoiding probate.