People, particularly young people, think about death about as much as they think about IRAs, 401k, life insurance,...well, you get the idea.
Truth is, unless you're on your death bed, mortality is just one of those things, we as people don't spend a lot of time thinking about.
For death- out of sight, out of mind, seems to be what we're comfortable with.
LIVING TRUST vs. HAVING NO TRUST
When you die, so do your assets. Or at least some of them. Without getting into legalese (fancy word for legal jargon), I'll say this,... PROBATE cost money, and if you live in California, boy-oh-boy, are you going to PAY.
For an estate valued at $500k you're looking at about $27k in probate costs, for an estate of $800k, $38k, you get the point; its a lot.
[See California Probate Code Section 10810 if you are interested in the full breakdown on the costs of California Probate].
With some of the highest Probate Costs in the country, California sure knows how to kick you when your "down and out," sorry, no pun intended. BUT here's the silver-lining; it doesn't have to be this way, and hopefully after you're done reading this article, it won't.
First, let's address the common misnomer of, "Why do I need a Living Trust, if I already have a Will? Seems like overkill, right? -WRONG.
By law, Wills have to go through Probate.
And PROBATE ladies and gentleman, is synonymous with what I like to call, "THE BIG bill." So why have a Will? Wills still have a function; look if you want to appoint a"Personal Guardian" for your minor children, or need to" "Disinherit a child;" you need a Will; there's no two ways about it. But I digress.
This article here is not about Wills! Afterall, they are much too complex to try and squeeze them in into one or two measly paragraphs. That discussion is best left for another day.
This BLOG CARES about money, and how to keep it with your loved ones; and more importantly, out of the hands of the court.
A LIVING TRUST SKIPS PROBATE, LIKE ALTOGETHER! AND IF THIS ISN'T INCENTIVE ENOUGH TO RUN OUT AND GET ONE, THEN KNOW THIS.--ON AVERAGE A WILL OR DYING INTESTATE (dying without either a Will or Trust) TAKES BETWEEN 1 TO 2 YEARS on average to settle. LONGER IF YOUR ESTATE IS COMPLEX.
This means, your loved ones will have to wait an exorbitant amount of time before they even get their inheritance.
In certain cases, this can be devastating. Imagine your mortgage not being paid for an entire year, your home would get foreclosed, and that's just the beginning of a long list of bad things that can happen.
IN CONTRAST, when you die with a Living Trust your estate usually settles in a matter of weeks. Wow, right!--This is not negligible folks, but a HUGE, MONSTROUS, SIGN ME UP TYPE OF DIFFERENCE!! And so easy too.
TIME IS MONEY!!---AND IN NO GREATER SENSE IS THIS TRUE, THAN WHEN IT COMES TO DISTRIBUTING YOUR ESTATE. Stop procrastinating! -Plan now; die later.
DO that Living Trust you've put off for far too long, and never ever have to worry about it again.
Until next time, my legalites!!
-RJM LAWYER
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