For typical homeowners, a house is their largest investment yet most don’t go through the extra step of protecting that asset. If you are a homeowner or have children, or both, then you might seriously consider creating an estate plan that includes a revocable trust. Take care of your estate so that you can relax and focus on what matters most now.
Avoid Probate.
Assets held in a revocable trust avoid expensive and time-consuming probate; a court supervised process that typically takes months or even years to complete. In California, both the executor and attorney are entitled to receive fees payable from the decedent’s estate. Worse yet, those fees are calculated by statute and based on gross value without considering mortgages or liens:
4 percent of first $100,000
3 percent of next $100,000
2 percent of next $800,000
1 percent of next $9,000,000
0.5 percent of next $15,000,000
Reasonable amount above $25,000,000
As an illustration, the executor and the attorney are each entitled to receive $33,000 for probating a home valued at $2,000,000. If the house has a sizable mortgage, there won’t be much left for your family or friends. These expenses can be avoided by simply investing a relatively minimal amount for a plan now.
Protect Your Beneficiaries by Planning in Advance.
Minor children may inherit property through probate if a parent dies unexpectedly; and under California law that child is entitled to manage his or her inheritance at 18. The first thing many people do with inherited money is look for ways to spend it. By creating a revocable trust, you can provide thoughtful distribution of assets and ensure funds are spent responsibly.
Provide an orderly way to distribute your assets and avoid probate in the process!