I am Mitchell R. Miller at estateplanningforyou.com. I have been a tax, trust, and the estate lawyer for 30 years. I have started this website to help you get ready to meet with your own estate planning attorney. One of the things we want to do in a estate planning is make sure that our clients of estate does not go through probate. Why? Because probate takes time, costs money, and generates major aggravation. If you only have a will, your estate will go through probate. Why is this bad? Let me give you an example.
My own mother's estate; she lived in Philadelphia, I live in Los Angeles. Correctly, she chose a Pennsylvania attorney to do her estate planning for her. Like many attorneys he said, "Oh! Probate is no big deal in Pennsylvania." Well, let me tell you, probate is a big deal in Pennsylvania or anywhere else. It took me two years to get my mother's estate through the probate process. Only because I hadn't charged the fee, those two years not take a big bite out of her estate. There was untold aggravation, filling out of forms and other time consuming efforts.
Here is another example, one from the May 2008 at American Bar Association Journal. An attorney in Illinois said, "Probate in Illinois is relatively painless, so long as there is no litigation associated with it. Probate requires only two court appearances and the decision-making does not require court approval, so long as there is no litigation or upset heirs interfering with the administration of the estate." Well, take it from me, there can be totally unexpected upset heirs or litigation that interferes with the administration of estate. And even paying an attorney's fees for just two court appearances and required filings can cause your heirs a great deal of money.
In some states like California, probate fees are set by law. In California, a smaller estate a $500,000 and with California house prices, that is a small estate, but have to pay an attorney's fee of $13,000. If the executor does not wave his or her fee, another $13,000. That's right; $26,000 in fees for an estate which might consist only of a small home, plus court filing fees, probate referee's fees, certified copied fees and aggravation, too much dimension.
Another problem with probate is that it is a public process; your will is in the courthouse records, that means anybody can go down and read it. If there is a contentious relative, who you want leave out of your will or if you just value your privacy, you want to avoid probate. Once the bottom line so that your estate doesn't have to go through these legal obstacles, a will is not enough to avoid probate; you need a living trust. A living trust has the same instructions for the disposition of your property that you would have in a will, but since the trust is a preexisting legal entity, it continues after your death. Therefore, your estate does not have to go through probate since there are no assets subject to your instructions which have to be proved.
The successor trustees you have selected, take over carrying out your instructions. You still need a will in case certain assets are not transfered to the trust. For example, if you walk out of your lawyer's office and get hit by a truck, your lawsuit against the trucking company for wrongful death is not in your trust and therefore, you have to have a will to pour that into the trust, as what we call such a will a pour-over will. In the coming weeks, I'll be providing you with information you need to plan before meeting with your own estate attorney. When you have an understanding of the state planning ramifications, before you meet with your attorney, you will save time and money, thanks for listening.
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