Do I Need a Trust? A lot of people wonder!


(Who wants to avoid Probate?)

Because of the limitations in the length of the article we are asked to provide, we are making some very general statements in this article.  For example, an estate with a gross value of just $400,000.00, would generate probate fees of $11,000.00 for attorney’s fees in a simple probate.  That same fee is also payable to the Executor of an estate if not waived by the Executor or Administrator.  Add to this the cost of probate filing fees, referee fees, publication fees, etc.  The higher the estate value, the higher the statutory probate fees will be.

It takes approximately one and one-half years for a simple probate to get through the San Diego County probate court system.  Each probate is required to file an Inventory and Appraisement with the court showing all of the property of the decedent going through probate.  This can include bank accounts, real property, mutual funds, stocks, bonds, etc.  The inventory and appraisement is subject to public scrutiny by anyone who wants to walk in and ask to see the file.  This could open up the estate to identity theft.

What does the State of California Provide?

The State of California provides a Small Estate procedure for estates under $150,000.00. If your total estate, real and personal property, is valued under $150,000.00, you “generally” would not need to file a probate within the State of California.

However, if your estate is over the Small Estate amount, excluding assets highlighted below, a probate would likely be required  So, who should consider a trust:

  • Anyone with an estate in excess of $150,000.00
  • Anyone who owns real property in the State of California, or elsewhere
  • Anyone with minor children
  • Anyone with children who are spendthrifts or who have “issues”.
  • Anyone who wants to control the timing and/or distribution of their gifts after death
  • Anyone who wants to provide for grandchildren
  • Anyone who wants to minimize or exclude estate taxes
  • Anyone who wants to keep their estate private
  • Anyone who wants to avoid probate costs and fees

Examples of other methods to get below the Small Estate amount: Accounts on which you can name a beneficiary to take at death are generally not subject to probate. (CD’s, Savings Accounts, money market accounts);  Life insurance proceeds are not subject to probate.  Funds from an annuity or other tax deferred assets where you can name a beneficiary are generally not subject to probate.

Authors:  Philip M. Vinci, Esq., and Stephen Ross, Esq.

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