How Do You Avoid Probate?
Open a Living Trust! The CREM Group prides itself on handling probate real estate, which is different from “regular” real estate. So, why are we telling people how to avoid probate? Because we’ve seen how difficult it can be to sell a home if it’s in probate, especially if you don’t have an experienced probate realtor. (We are experts in this niche!) If you’re just starting, you may want to know what probate is.
Probate Definition
Definition: Probate, in general, is the judicial process in which an instrument purporting to be the will of a deceased person is proven to be genuine or not; lawful distribution of the decedent’s estate. In essence, it’s the legal process of administering a will. Also, it is the judicially supervised process for marshaling a decedent’s assets, paying proper debts, and distributing the remaining assets to the persons or entities entitled to them. An estate may be probated even if there is no will.
This month, March 2020, and probably next month, too, are great times (when you’re staring at the walls quarantined in your home) to dig down into the pages of your will, dust off the real estate files, and get your financial affairs in order.
IN THIS POST, WE WILL ANSWER THESE QUESTIONS:
- Why is probate “bad”?
- What is a living trust?
- How is it an advantage to have a trust?
- Who can draw up a trust agreement?
- When should you open one?
Why is Probate “Bad”?
So, back to probate real estate: It can take up to a year or longer to sell a house that’s in probate. Check out this page of our website to see the steps involved. Are you back? Great. So, a better way to leave one of your biggest assets (your house) to your heirs is to put it in a revocable (living or inter vivos) trust. While the CREM Group is one of a smaller subset of real estate agents that handle probate real estate, our company represents trust properties and “normal” real estate in Los Angeles and Orange Counties as well.
Probate isn’t “bad,” per se. It’s for your protection and makes sure everyone has the correct information and gets the right property, correctly titled, and so forth. Here’s that link with the definition of probate again in case you missed it.
HERE’S WHY PROBATE IS BAD. BRIEFLY, PROBATE CAN:
- Tie up property for months, and it can take more than a year to sell a probate property.
- Be costly. In some states, legal and court fees can take as much as 2% to 10% of an estate’s worth.
Wouldn’t you rather have your heirs have that money?
What is a Living Trust?
Sometimes, the living trust is called a revocable inter vivos trust. They’re the same thing.
“A trust is a written legal instrument created by a grantor during his or her lifetime or at death for the benefit of another. Property is given to a trustee to manage for the benefit of a third person. Generally, the beneficiary gets interest and dividends on the trust assets for a set number of years. The property itself is sometimes termed the “corpus” of trust.”
A trust is a safe, legal bucket to drop your assets into so that your wishes are carried out after you are gone, in a timely fashion, with minimal expense. And you can change your mind! With a revocable trust (unlike an irrevocable trust), you’re free to give the house to one child and the yacht to the other, or whatever, and then change your mind… while you’re still alive, that is.
How is it an Advantage to Have a Trust?
The trust establishes “who gets what.” You are the driver, the one who clarifies your wishes while you’re alive. Here’s why that’s important: A probate process costs money because many of these people will be paid to ascertain the correct dissolution of your estate without a trust. It can add up to anywhere from 2 to 10% of the estate’s value!
- Personal Representative
- Attorney
- Accountant
- Appraisal and Business Valuation
- Miscellaneous
Who Can Draw up a Trust Agreement? (Can you do it yourself?)
We are real estate agents, probate real estate agents, and we are lawyers—both of us. So, with all those credentials, we still recommend having an attorney who specializes in wills and trusts do your trust for you. Lots of internet sites might say you can do your own, but if it’s wrong, and you’re gone, you’re sunk. Just saying.
We are real estate agents, probate real estate agents, and we are lawyers—both of us. So, with all those credentials, we still recommend having an attorney who specializes in wills and trusts do your trust for you. Lots of internet sites might say you can do your own, but if it’s wrong, and you’re gone, you’re sunk. Just saying.
When Should You Open One?
Do it now. Make an appointment with an attorney. Then, do your research on the internet.
You’ll see that getting the paperwork together can take time. For your home, you’ll need the property information, the deed of trust, the banking information if there’s still a mortgage on the house. Consider putting in other items: stocks, bonds, and other security accounts held by brokerages. Check with your attorney, but you might also consider small business interests, patents and copyrights, precious metals, valuable works of art, musical instruments, antiques, and collections of stamps, coins, or other objects of significant value. All need documentation verifying their worth. It may take a while to collect these certifications.
You’ll see that getting the paperwork together can take time. For your home, you’ll need the property information, the deed of trust, the banking information if there’s still a mortgage on the house. Consider putting in other items: stocks, bonds, and other security accounts held by brokerages. Check with your attorney, but you might also consider small business interests, patents and copyrights, precious metals, valuable works of art, musical instruments, antiques, and collections of stamps, coins, or other objects of significant value. All need documentation verifying their worth. It may take a while to collect these certifications.
Bottom Line
Our firm handles all kinds of real estate in Los Angeles and Orange County, California. We are trained probate real estate agents with years of experience in handling these unique properties. We can tell you that having your home and other assets in a revocable living (inter vivos) trust will save your family both the time and money involved with probate.
Take care of your loved ones. Put your home and other high-ticket valuables in a trust. You have time to do this right now during the pandemic we’re facing in this Spring of 2020. Then hire a real estate agent with knowledge in handling property from a trust. Otherwise, be sure to hire a probate real estate agent who has familiarity with probate real estate in California. And especially call us if you’re in the Los Angeles and Orange County, California areas.
As always, contact us here if you have any questions about real estate, probate real estate, or trust real estate properties.
DISCLAIMER:
This content is meant purely for educational purposes. It contains only general information about real estate and/or legal matters. It is NOT legal advice and should not be treated as such. We recommend consulting a legal or tax professional before acting on any material, opinion, or point of view described herein.