Combining Households Has Challenges, Benefits
for Picking a Professional Financial Advisor
Corner: Sac Bridges: Historically, Structurally Distinctive
a Revocable Living Trust?
For years people have asked me “what is a revocable trust?” and “do
I need one?” The answers are simple. A trust is just another way to hold
title to your property and other assets and, yes, if you have assets over $100,000
you probably need one.
Once created, the trust has the legal power to own property and the creators
of the trust, called “trustors” may transfer all or part of the property
they own to it. Trustors retain control and ownership of the assets placed in
the trust because the trust is completely modifiable and revocable by them at
any time during their lifetime, so long as they remain competent and able to
manage their affairs.
The great benefit of a revocable trust is that once the trustor’s assets
are transferred to it, the probate court treats it like it was a separate person
and assets belonging to the trust are not required to go through probate upon
the death of the trustor. Therefore by transferring all assets to a revocable
living trust, there will be no assets in the trustor’s estate subject to
the probate process. No probate will be required and probate is therefore avoided.
All assets may then be transferred, by the successor trustee, to the rightful
heirs and beneficiaries as outlined in the Declaration of Trust without court
supervision or orders.
Why avoid probate?
For years now we have heard that we should avoid probate and much has been written
on how to avoid probate but the public is still quite unaware of why avoiding
probate is to their advantage. There are three very good reasons. First is the
length of time involved in processing an estate through the probate court. It
is a very long, drawn out and time consuming process. It is the process whereby
a court takes control of a deceased person’s estate upon that person’s
death and transfers it to the rightful heirs. It is a complicated and technical
process that requires experts in probate procedure and law (probate lawyers)
to handle or process the estate through the court system. Lengthy notices have
to be given, publication in newspapers have to be done, court hearings are required
for numerous matters, and legal rules make quick administration of an estate
almost impossible. It is common for even the simplest, smallest probate case
to take over a year to complete.
The second major reason to avoid probate is simple: the cost. Probate attorneys,
although they perform a valuable service because of the complexity of the probate
law, are paid statutory fees set by law on the basis of a percentage of the gross
value of an estate, plus what are called extraordinary fees. Avoiding probate
means avoiding these fees and costs.
A final reason to avoid probate, although not as burdensome as the first two,
is the plain simple fact that all probate cases are public. Most documents are
public, hearings are public, and the terms of distribution in a will are public.
Even a detailed inventory of the property and personal assets of the estate must
be made in writing and made public property — even your debts can become
This is not the kind of process people want to subject their heirs to if they
can avoid it.
When loved ones are lost we all want to be able to take care of matters quickly
and efficiently, with as little bureaucratic red tape as possible. The probate
system does not do this and therefore, if it can be avoided, it should be. Taking
time to create a revocable living trust can save your heirs time and money, as
well as the stress of dealing with probate court during what may already be an
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