Unfortunately, it happened in my family more than once. My father and mother both passed away. Distribution of their wealth fell upon my shoulders as the estate planning attorney in the family. During a time of great sorrow, it was difficult to think about the distribution of their assets, but it was a necessary evil. Based upon years of practice and personal experience, I feel that the job of distributing assets after the death of a loved one can be greatly simplified if you plan ahead to avoid the probate process.
For each of my parents, I had established a living trust (a trust that you create and takes effect while you are alive) to make it as easy as possible on my siblings and me because I was all too familiar with the process of probate, and my wish was to avoid it. The great advantage of placing assets in a revocable living trust is you can control the assets you put into the trust the same way you could before the assets were placed in the trust but, the transfer of assets upon your death to your beneficiaries can take place immediately without the probate process. As many people know, Last Wills and Testaments must be probated at death – which is a court proceeding to prove that the Will is valid before the executor has the legal authority to distribute the assets to the named beneficiaries.
Having represented numerous clients through the probate process, I know that substantial delays and obstacles present themselves when probating Wills. A living trust allows our clients to have the control to deal with and eventually distribute their assets upon death without their heirs having to prepare a court petition, serve notice and a copy of the Will on the heirs and potential heirs, get proof of service along with the petition back to the court, go through the hoops the court calls for depending on the particular facts of the proceeding (for example, in several proceedings I had to identify, locate and serve various heirs located all over the country and even in distant countries or I had to prove that an heir, who would have been over 106 years old, had predeceased, but no one had any knowledge of where he passed away and the search for proof of his death was daunting) and then wait for a judge to rule on whether we made enough of an effort to locate and attempt to notify these heirs. This could take weeks, months, and in some instances years!! In other words, the probate process is one over which we have very little control. In the meantime, the real properties left in the decedents’ names could not be sold, monies could not be marshalled, and the items in safe deposit boxes could not be removed – and so on and so on…
Imagine how I feel when our clients want to put a house owned by a decedent up for sale because they are the named executor under a Will and the named beneficiaries are anxious to get the sales proceeds from the house, and I have to give them the bad news that they cannot until I get court approval for them which may take months and sometimes years depending on the fact pattern. As a result, the clients must extend their own personal funds to keep the house expenses paid and they may even lose a potential buyer because of the delays. If the decedent’s house were in a trust, however, the trustee would have the legal right to sell the house the very next day!
Now imagine the mental stress that occurs with probate. Would you feel good about being forced to go into business with your brothers and sisters and maybe even your surviving parent? Many people would shutter at the thought, but in essence that is what probate forces you to do. It is no wonder that a common side effect of probate is that family members stop talking to each other and relationships decay. However, if the assets were held in trust, the settling of the trust could be accomplished in weeks, reducing the strain of working together with family members for an extended period of time while the probate process unfolds.
From a purely economic view, the costs and court fees involved with probate usually far exceed the costs associated with obtaining and then eventually settling a trust. Often times, an attorney is not even needed to distribute assets from a trust. Whereas the executor’s commissions, attorney’s fees, court fees and possible genealogist’s fees can be exorbitant in order to conclude a probate process. Moreover, time is money and the fact that it takes less time to settle a trust equates to a greater savings to the family in the long run.
Finally, the probate process is a public event. When a person dies leaving behind a Will, anyone can look up the contents of that Will. They can see who the beneficiaries were and, in some cases, who was specifically cut out. They can also see how much was left to each person! With a trust, since there is no court proceeding, no one is entitled to see who got what and how much other than the intended beneficiaries.
Is there any wonder in why we recommend, like I did for my own parents, considering living trusts in an estate plan? A living trust can give back control and privacy to your loved ones and make their lives easier and less costly upon your death. If you have not considered a living trust, perhaps you should…