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Perhaps the most important benefit of a Living Trust is that it permits
the family or beneficiaries of someone who dies to avoid Probate,
which is the expensive and lengthy court process by which an estate is
transferred when a person dies with only a Will or without a Will (i.e., "intestate").
Under the dreaded Probate court process, distribution of a loved one's
estate or property usually comes near the end of the process. The
Probate court process usually takes at least a year, and in many cases it can go
on for several years, especially if someone steps forward to "contest"
the Will. Family members and beneficiaries of the person whose estate is
probated typically must wait until the end of the Probate court process,
including any contest, in order to receive the property left to them.
Unfortunately, the law makes it very easy for someone to "contest" a
Will. The person contesting the Will essentially steps forward and merely
objects based upon very general (and often easily contrived) grounds, thereby
delaying the entire Probate process. Often, "contests" to a Will
are nothing but thinly veiled blackmail schemes designed to hold the entire
process hostage until the person contesting gets more than is deserved. A Living
Trust can avoid this nightmare of endless probate delays, for a trustee of a
Living Trust (named by the person creating the trust) usually can begin to
distribute assets according to the Living Trust immediately after someone dies.
The trustee does not have to get permission to distribute assets (as in
probate) because the person creating the Living Trust has already specified how
the property is to be distributed without the need for probate.
A Living Trust can also avoid the expense of Probate. Under the
Probate Code, for example, the law sets the probate amount to be charged as
attorneys fees based upon the gross value of the estate. Under the
expensive probate process, an attorney (and a personal representative) can get
paid a percentage of the gross value of the estate (e.g., 4% of the 1st $15,000;
3% of the next $85,000; 2% of the next $900,000; etc.). A Living Trust can
avoid this payment to attorneys because the person creating the Trust sets the
amount of compensation for the trustee and others handling the estate.
Indeed, there is no requirement that any compensation be paid at all.
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A Living Trust also protects the privacy of the person who dies
as well as the privacy of family members and beneficiaries. Unlike in
probate, there is no requirement that the Living Trust be
"published" (i.e., filed with the court and notices placed in
newspapers). No one need know the value or contents of the Living Trust
estate, and no one need know how much each beneficiary receives. A Living
Trust allows the trustee (chosen by the creator of the trust) to privately and
discreetly distribute the assets of the estate without notifying the public. |
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