Avoidance of Probate

Why is this important?  Probate refers to the entire court process of administration of a decedent’s estate.  The process involves proving the will, collecting the decedent’s assets, paying debts and taxes, and distributing property to beneficiaries or to trusts for the beneficiaries’ benefit. The biggest downside to probate is that formal court-supervised administration of a decedent’s estate tends to be slow and expensive. The minimum period for a probate proceeding is six months. Costs include court filing fees, probate referee appraiser fees, the personal representative’s commission, and attorney fees (typically established by a statutory fee schedule). A revocable trust, on the other hand, is generally administered quickly, at a much lower cost, without the “tie-up” in assets that occurs during probate.

Privacy

Because a revocable trust need not be filed with the probate court, the publicity of court filings and proceedings may be eliminated. Persons who hold significant wealth, as well as other public figures, are particularly attracted to this aspect of revocable trusts.

Continuity of management

A funded revocable living trust allow the trustee’s powers to continue uninterrupted by a settlor’s death.  In contrast, at least three to four weeks are required to appoint an executor in a probate proceeding. Hence, a revocable trust is quite advantageous if the settlor’s assets require uninterrupted management or rapid decision making after the settlor’s death.

Tax Considerations

Forming and funding a revocable living trust does not always result in tax savings, although with higher net worth individuals, it often does.

Contact the Tunney Law Group today at (415) 367-5222 to schedule a consultation. We proudly serve clients throughout California.