Posted on 09/14/2010 7:43:07 PM PDT by LouAvul
Hypothetical situation: An attorney is telling an heir that the heir's parents need to set up a trust. The attorney says the will always winds up in probate. Let's say the parent's estate involves property and stocks. Let's say the parents have a straightforward will.
The attorney wants to set everything up as a trust. What's the advantage? Does a will always and inevitably wind up in probate with the heirs having to pay corresponding fees?
Thanx so much.
I hated this class, but I’ll guess that the will ends up in probate if an affected party contests something.
Why would he tell them to set it up in a trust? I am pretty sure that a trust is administered by someone other than the heirs FOR A FEE (would it be the attorney in question in this case?) because the parents don’t trust their heirs not to piss away the entire inheritance in a couple of years or because the heirs might be minors and incapable of administering the money themselves.
>>The attorney says the will always winds up in probate.<<
Well, duh! Probate is the court that oversees wills. It is like saying “divorces always end up in Family Court!” Even an uncontested divorce/dissolution of marriage has to be signed off by a judge.
Whether to use a trust or not is more a financial question than a legal question.
At that point -- all the probate laws kick in... and the judge and clerk have a lot to say about disposition of the estate.
If the valid will is clear about who is to manage the affairs and finances of the deceased, and the deceased trusts the executor-- no bond is required.
The valid will is usually registered in probate court, but they cannot tell the executor how to manage the trusts & resources of the estate.
I am a layman -- not an atty... but have managed my parents' estates. One had a will.... one did not.
I hope this helps.
The attorney will often set up a revocable trust and put the assets in that trust. It has two distinct advantages- the assets in the trust are not probate assets and thus can save fees and, where the individuals are wealthy, avoid public inspection since the will is a matter of public record while the assets in the revocable trust are distributable under the terms of the trust and are not probate assets.
Trusts are used to accomplish many objectives in estate planning and can be quite complex. I’m not really sure based on the limited info that you gave what the attorney is doing, although I suspect that he is recommending revocable trusts to avoid probate. This is a common practice.
Yes it will winds up in probate and thats is why theys call it “ a will” — It will!!
This is not the sort of question that can be answered with so little information. It depends on what sort of assets, what state they are in, how much the estate is worth, etc. They need a competent lawyer, a bank trust dept (where they could probably get free info) or something like that. I wouldn’t suggest you take advice that you get in a public forum. Good luck.
I understand that wills may go to probate depending upon the whim of the judge. I understand that Trusts don’t.
However, I’m a musician and teacher, not a lawyer.
You need a lawyer who you can trust, if there is such an animal.
The only estate assets that require probate are those which require a title transfer, such as for stocks and real property. The advantage of the trust is the property is put in the name of the trust so it is no longer in the name of the future decedent.
There are different kinds of trusts. I suspect the attorney is talking about a living trust, set up while the trustors are still alive. The property and other titled assets are officially transferred to the trust and the trust contains directions as to what happens to the property on the death of one or both settlors (assuming a married couple). The usual scheme is the assets are held in trust for both settlors, then for the survivor, and then after the last settlor has passed, the assets are split among the designated beneficiaries, usually the kids.
This kind of trust may or may not have a paid trustee. While the original trustors are alive and well, they usually act as trustees, then often a kid, or two or three kids, act as trustee or co-trustees. Generally the property is split up as soon as possible after the survivor’s death. To the extent a lot of management time is needed, some trusts stipulate a “reasonable fee” to the acting trustee. Rarely is the trustee a stranger to the trustors or beneficiaries.
The advantage of the trust versus probate is privacy (the assets and distribution don’t become public records), speed (probate takes at least four and usually closer to six or more months to settle in the best of circumstances), and availability of property management during periods when the trustors may be still alive but unable to manage their own affairs, thereby avoiding the need for a conservatorship, another bothersome legal procedure.
The cost for a trust can be quite reasonable compared to probate, especially those state whose probate fees are based on a percentage of the estate value. A living trust might cost $500-700 or so to set up while probate may cost two or three times as much.
Hope that answers some of your questions.
LOL!
There are a few pieces of property that do not have to pass through probate such as life insurance if it is properly designated.
ping for later!
A lawyer you can trust! LOL
A lawyer you can trust! LOL
Factors affecting probate are size of the estate, kind of assets left, who inherits, contested or not.
In a simple uncontested will with a few tens of thousands of value a lawyer will file with the Superior Court, a clerk will examine the documents, the court will have a brief hearing and the estate closed.
Usually an heir can be the executor if so stated in the will, either paid or unpaid.
But again state laws vary.
Actually, you do not have to have a will. It can be done intestate, and through an affidavit of heirship, declaring who the heirs are, etc. If someone wants specific things to go to a specific person/entity, you need a will.
You do NOT need a trust, unless you are worried about the death tax coming back. In a trust, the estate can avoid the death tax since the assets remain in the trust,not an individual subject to the tax.
Cannot give legal information but I worked for a Law Firm at one time that specialized in Trusts. One of them told me that the advantage is that the heirs will see which attorneys handled the trust and assume the deceased trusted them and wanted them to handle the case Yes, for the fees.
yes
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