Law Offices of Sandra L. Miller, lawyers in Seal Beach, CA, California

"I DON'T NEED NO STINKING LIVING TRUST"

Most of us spend our lifetimes attempting to build wealth for a comfortable retirement. We pinch pennies here and save cans there hoping that, in the end, the sun will shine a little brighter in that exotic location. We clip coupons, watch sales, drive farther for that cheaper price, and generally are on the hunt for the deal of the century. However, most of us have not considered what happens to our egg once we have permanently exited the nest. That is, what kind of situation are our loved ones going to be in when dealing with our estate.

The usual course of events finds an estate going through what is called a "Probate." This is a system that has been set-up to distribute your assets according to your wishes (if you have a will), or according to state law (if you die without a will) with the courts acting as big brother and overseeing the whole thing. The process is very slow (taking anywhere from 6 months to 2 years) and the costs are high (set by statute according to size of estate). Most folks think they have done their duty by having a will prepared and naming an executor (usually a close friend or family member) to handle the day-to-day management of their estate until it's finalized. That's it. That's usually the extent of a person or couple's estate plan (not really much of a "plan").

The other way an estate passes is through a living trust. Transfer of the deceased's property is accomplished much more quickly. It begins as soon as the person passes away and requires no appearance or court interaction. A successor trustee merely follows the directions listed in the trust and distributes everything pursuant to the wishes of the deceased.

To put the icing on the cake, you'll name yourself as the first trustee so that you'll have complete control over the trust while you are alive. That means that you can continue t manage your assets as you choose. Furthermore, the trust is fully revocable - you can dissolve it at any time.

Are you thinking: "I/We don't need one of those living trust things," "I/We don't really have that many assets," "I/We aren't wealthy," "I'm single and don't have anyone to consider," etc. The fact is, everyone probably has an estate (whether it's a house, jewelry, art, etc.). Okay, I know a few of you are saying, "Hey, I only got the shirt on my back." Well, my response is you still should think about a living trust. Consider who would be appointed guardian of your children's money should you become incapacitated, or who would manage your affairs and make your healthcare decisions should you be unable to do so. These are just a few of the many non-asset issues that can be addressed by a living trust/estate plan.

Finally, here is the key part: even with a will, probate fees on a smaller estate ($250,000 home, paid for or not) can run more than $13,000. That's well over fifteen times the cost of a living trust (and I haven't even talked about the tax implications).

So, unless you're pinching those pennies and clipping those coupons for later probate fees, consider a living trust and bypass the probate process. This provides you with the control over when your assets are distributed, complete privacy with regards to how your estate is handled (your will becomes public record once it is probated), and absolute control over how your assets are spent.

Estate laws can be complex and can vary according to the size of the estate. I know it's tempting to go the do-it-yourself route, but this may be a dangerous choice. Consulting a tax advisor and attorney to see if a living trust may be appropriate for you is a no lose situation.