After you establish an estate plan, you will likely have two documents that others may need to rely on. The first is the Power of Attorney and the second is a Certificate of Trust. Both of these documents need to be relied upon by others.
The untimely passing of a loved one is difficult enough, let alone getting through the legal nightmare that is probate. First, the main functions of probate are to collect and manage all the assets subject to probate and to pay off any debts or taxes owed against the estate. To prepare for this administration of the estate in court you most likely will need an attorney. However, once you found that attorney, how do you prepare for that first meeting?
There are many things that can cause someone to move, and depending on the reasons, the method, or other decisions, it may be appropriate to update a trust or a will. Some of the reasons for moving, may be a reason to review, for example, is the move because of a change in marital status (marriage/divorce)? Is the move because you’re having another baby and need more room? Is the move because you were just hired in a fantastic new job? Were you just recruited to play on a professional sports team? Did you just win the lotto? Continue reading Do I need to update my estate plan if I am moving?
Proper estate planning can help save time, save money, and protect the privacy of an estate. Probate expenses can have a wide variance depending on where you live and how much you have in assets. Some states, like California, have specific fee schedules based on the assets you own upon your death. Other states, have subjective fees where the probate statutes simply state that the fees must be reasonable.
These fees for Probate also are based only on assets and ignore any debts, which this means if you own a $500,000 home, and owe $450,000, the probate fees are based only on the $500,000 value of the home, ignoring the mortgage. One thing to keep in mind while reading this is that a properly executed trust can avoid Probate entirely, negating these fees.
In Part 1, we explored what a Testamentary Will was and the typical costs associated with Probate of the Will. In Part 2, we explored what a Revocable Living Trust was and started exploring the benefits of a Revocable Living Trust. In Part 3, we will finish exploring the benefits of a Revocable Living Trust and the benefits of a Testamentary Will.
Probate takes time and is often dependent on court schedules. As an example, there was one case that we followed in 2012-2013 that had a trust, and had to go through probate because some of the assets were not included with the Revocable Living Trust. In that case, the probated items took approximately nine additional months to resolve and cost attorney and personal representative fees were an additional $17,000. I am using this example because it was a very simple estate with one beneficiary (widower), with no disputes, and no delays in the processing of documents. It is important when you establish your trust; you ensure all of your property is properly included with the trust.
In Part 1, we explored what a Testamentary Will was and the typical costs associated with Probate of the Will. In Part 2, we will explore what a Revocable Living Trust is and start to explore the benefits of a Revocable Living Trust.
A Revocable Living Trust is a document that tells the successor trustee (acts similar to the executor or the personal representative in Testamentary Will) what you want to happen with your property after you pass away, and you can amend (change) the Revocable Living Trust at any time in the future. A revocable living trust can also continue beyond the immediate distribution and can make distributions for ongoing care of children or pets.
One of the first questions we are usually asked is if someone really needs a trust or a will. In answering that, we need to explore what a Will does, how a Trust differs from a Will, and why they are important in an estate plan.
Everyone should have a either a Will or Trust (Estate Plan) because without one, the courts rely on statutes within the state to determine what happens to your estate. Even if there is no individual that you wish to leave your property to, it is often preferred to leave it to charity rather than the possibility of the government taking all or some of your estate.
There are three main reasons people choose to have a Revocable Living Trust over a will. A Trust tends to save money, save time, and protect privacy, although it tends to have a higher upfront cost than a will, it will tend to be cheaper than a will upon death. In this part, I will briefly discuss what a will does and explore the costs to the estate going through probate. Continue reading Do I need a Trust or Will? (Part 1)