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Estate Planning

Jul 01, 2015 12:44PM ● Published by Jennifer Neys

by Daniel DuRee 

             The first question most people in California have regarding estate planning is, “Do I need a living trust?” The short answer is probably yes, but I will discuss some factors that determine if a will or a trust works best for you as the core of your estate plan. The two primary drivers regarding the choice of a will or a trust are the amount of assets you have and whether you would benefit from the probate process. If you have concerns about the person who would administer your estate or about potential creditors, probate still could be advantageous to you. 

Amount of Assets

            The first step in the inquiry is the amount of assets in your estate. Any estate in California with gross assets outside of a trust in excess of one hundred and fifty thousand dollars must go through probate even if there is a will. If you have one hundred and fifty thousand dollars in gross assets, the next step is to determine if the probate process is beneficial to you and your family. Most people prefer to avoid probate, but there are certain situations where you may benefit from the court-supervised administration of your estate.

Drawbacks of Probate

            The primary drawbacks of probate are the time, expense, and public nature of the probate process. It can take years and easily cost tens of thousands of dollars for even a straightforward probate. The probate process is all on public record and can expose beneficiaries to unwanted attention.

Positives of Probate

            In light of the above drawbacks of probate, why would anyone benefit from the probate process? The first reason is that a judge will oversee the process if you are concerned about excessive conflict or fraud. Some people may not have a person they trust to administer their estate through a trust. In probate you know that nothing will be distributed without a court order from a judge.

            The second benefit of the probate process is that there is a foreclosing of creditor claims before the distribution. So, a person with many potential outstanding creditors may benefit from probate. 

            In general, if you have a person or people that you can reasonably trust to administer your estate and you aren’t concerned about potential outstanding creditors, probate should likely be avoided. Of course, if either of these two standards is not met, probate may be advantageous. Regardless, you should consult with an estate planning professional if you have any doubts. Please call my office for a free consultation regarding these issues.

Daniel L. DuRee is a third generation resident of Contra Costa County and a licensed attorney practicing in Walnut Creek. He can be reached at (925) 210-1400 or visit www.DuReeLaw.com.

Home+Finance July 2015 Do I need a Living Trust?
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