Avoid Probate, Protect Your Heirs: The Power of a Living Trust
Understanding Revocable Living Trusts
A revocable living trust allows you to transfer assets directly to new owners, which helps you avoid probate.
Why Use a Revocable Living Trust in California?
Avoid the Fees
The first reason to use a revocable living trust is to avoid probate costs. If your gross estate is over $100,000, your probate costs will be around 4% of this value. Keep in mind:
- You must still pay your debts.
- Debts do not reduce your probate fees.
A simple trust can help you completely avoid these fees. With the help of an attorney, you can retitle assets in the trust. This might cost around $400 per hour, but it will be far less than probate costs. For example, probate costs for a $1 million estate could be about $45,000.
If you own assets in many states, each state may require its own probate process. This can lead to a major paperwork and expense nightmare. Trusts provide a way to completely avoid probate.
Keep Your Privacy
Another reason to use a trust is the privacy it provides. Assets that go through probate become public records. In contrast, assets passed through a trust remain private. This helps protect your heirs from fraudsters and scammers.
Greater Protection for Your Heirs
Trusts also offer greater protection for your heirs. Here’s why:
- Anyone can contest a will.
- Many wills contain unclear language, which can result in costly lawsuits.
- Trusts usually provide stronger legal support for your wishes.
Important Note
Be cautious when using a revocable trust. You may need to update your trust as circumstances change. Each update may incur a fee, and you might need to create a new trust. This keeps your trust in line with current laws and updates as your assets change.
Your Thoughts?
Will you invest time and money today to save your heirs from probate costs and hassles? If you’ve already created a trust, have you updated it in the last five years?