It’s obvious that the greatest trust feature is avoiding probate! However, did you know that one of the main reasons living trusts have become so popular in California during the last 20 years is due to skyrocketing real estate prices? When real estate values increase, so too, do individual and married parties estate values – thus – leading to potentially higher probate fees if one does not have a living trust!
A Great Trust Feature
Merely having a living trust does not guarantee probate avoidance! One such trust feature that is critical is transferring your assets to a living trust, or, holding the asset in joint tenancy or some other form of ownership that maximizes the use of probate avoidance procedures. In short, by transferring property into a living trust, a person’s loved-ones can avoid expensive and time-consuming court procedures that would otherwise be required to transfer those assets to an intended beneficiary upon that person’s death. Utilizing this trust feature will certainly avoid probate in California.
Although a living trust eliminates the need for court intervention, it does not eliminate the need to administer a person’s estate. Presuming a person is not the sole beneficiary, the successor trustee will be required to collect or “marshal” the assets, pending distribution to the beneficiaries, and gather appraisals related to those assets, together with paying (or settling) all outstanding debts of the decedent and finalizing their last tax return.
Thus, one must realize that administration of a living trust will take time and money – such as legal fees, accounting fees, asset transfer fees, and any trustee fees (if allowed). Accordingly, it’s important to notify any and all remaining beneficiaries of a trust that distribution of a person’s estate may take more time than they may have realized. Nevertheless, the trustee should remind all beneficiaries that the trust will save anywhere from 50% to 90% of the time and costs involved in probating a will. Now, that’s a great trust feature!