Living Trust vs Probate
A Living Trust (also known as a Revocable Living Trust or Revocable Trust) is a trust in which you put your assets during your lifetime.
A Revocable Living Trust allows you to move your property into the trust’s name to avoid probate court, and further allows you to choose the beneficiaries of your trust.
Most Living Trusts drafted by estate planning attorneys are amendable and revocable. The main idea behind having a living trust drafted is protection.
As an estate planning attorney in Covina and Temple City, Tony always ensures that his clients understand the following benefits of having a living trust, verses going through probate court, to transfer a deceased person’s assets.
There are three main benefits of having a revocable trust:
Benefit #1: Cost
A typical living trust package drafted by an attorney in the San Gabriel typically costs around $2,000. Although this is not a small amount of money, $2,000 is a lot less than probate fees.
Attorneys’ fees in probate court are set by statute, which more simply means that the fees are set by the California legislature and are not as negotiable as ordinary attorneys’ fees. For example, as we know in the San Gabriel Valley, property values have risen significantly in the past few years. As a result, if a person in Covina or Temple City passes away without a living trust and has one asset, a house worth $750,000, the estate planning attorneys’ fees by law would be $18,000. That is a big difference in attorney’s fees.
Benefit #2: Choice
If a person has a living trust, he or she can choose who gets what assets and when. For example, if you don’t want to give your estate to your only child, a “problem-ridden” son, then you can choose to leave your entire estate to your 16-year-old granddaughter when she turns thirty years old. You can specify that the trustee can use the trust money for your granddaughter’s health, support, maintenance, and education prior to reaching age thirty.
Without a living trust, using the above example, your “problem-ridden” son is your heir-at-law, and he would receive your entire estate outright.
Benefit #3: Time
Tony has met with a client in Covina, California, drafted, and finalized a revocable trust in a day. Once a person with a living trust passes away, that person’s trust assets transfers to the beneficiaries almost immediately.
The average probate case has been taking nine to twelve months to complete before assets are transferred. This long time period obviously makes the grieving process even more difficult for the surviving loved ones.
If you are looking for an estate planning attorney in Covina or Temple City, California to draft a living trust, please contact Tony at (626) 858-9378.
For more information on living trusts, Living Trust – American Bar Assosciation.