Frequently Asked Questions

Many mistakenly believe that a will and a trust are one and the same. They are not. They achieve two very different results.

A WILL is a blueprint for a probate judge that informs the judge of their intentions for their children and their assets when they pass. It does not prevent court involvement and in fact, requires that an estate be forced to probate.

Wills are public information and require publication online and/or in print and require service on heirs and creditors so they can contest/dispute the will.

A TRUST is a legally binding contract between the Grantor (whose estate is being planned) and a trustee (who manages the assets when the Grantor passes). A trust does not require any court involvement and allow all assets of the trusts to pass immediately to the intended beneficiary.

A trust is completely private and there is no opportunity for dispute.

Contrary to popular belief, neither your spouse nor your children will automatically inherit your home when you pass. A deed designating a beneficiary on death or naming a trust must be properly recorded in the county where the property lies BEFORE the owner/person who holds title dies.

When such deed is not recorded prior to death, even a spouse and/or children of the deceased will be required to probate the home. The home (or any real estate for that matter) cannot be sold or otherwise transferred until the probate court case is closed. This can take years and the property taxes, insurance, mortgage and maintenance must continue during this time.

In order for your home to transfer to your spouse or kids without probate court involvement, the home should be transferred to a trust.

Estate Planning can be expensive, but hands down, the most expensive estate plan is one that does not exist.

When there is no estate plan or just a will, the assets of the deceased’s estate must be forced into probate court. Probate court is lengthy (years even when everyone agrees) and very very expensive.

PROBATE IS a court-supervised legal process that is necessary after:

1. A person has died; and

2. The person’s total property value (personal property and/or real estate) exceeds the probate threshold (between $55K-$166K; depending on state of residency and adjusted periodically);

3. The transfer of property is not controlled by asset title (ex: through a living trust)

4. The person has any interest whatsoever in real estate not held in trust

Probate is the most expensive way to transfer property. Expenses (compensation to the personal representative and to the attorney) are paid from the estate; the amount is determined by law and is a percentage of the estate.

Here is a breakdown of typical personal representative and attorney fees at different estate values in the year 2021:

$200K estate → 9K to attorney+ 9K to executor = $18K-20K in fees

$500K estate → 15K to attorney+ 15K to executor= $30K-45K in fees

$1M estate → 25K to attorney+25K to executor= $50K-90K in fees

$1.5M estate → 30K to attorney+30K to executor= $60K-135K in fees

$2.5M estate → 40K to attorney+40K to executor= $80K-225K in fees

These are typical figures for an “uncontested estate”. This means every party, creditor and beneficiary agrees how the estate will be paid out. If anyone disagrees, the estate will be litigated (a lawsuit will be commenced) and the cost will go WAY up. Years will be added to the process, property cannot be sold, and the estate is drained until the probate case is closed and assets can be distributed.

The simplest way to avoid probate, is to draft a revocable living trust so assets are distributed without court involvement and made available to beneficiaries immediately.

Here is an estimate of typical costs to set up a revocable living trust:

Single person, basic trust, 1 parcel of real estate= $4,000 in fees

Couple, basic trust, 1 parcel of real estate= $5,000 in fees

Trust with asset protection= $5,500-$6,500 in fees

Trust with asset protection+tax shelter= $7,500-$8,500 in fees

Additional parcels of real estate will increase fees by about $500 per parcel depending on recording fees which vary by county and state.

PROBATE IS a court-supervised legal process that is necessary after:

1. A person has died; and

2. The person’s total property value (personal property and/or real estate) exceeds the probate threshold (between $55K-$166K; depending on state of residency and adjusted periodically);

3. The transfer of property is not controlled by asset title (ex: through a living trust)

4. The person has any interest whatsoever in real estate not held in trust

Probate is the most expensive way to transfer property. Expenses (compensation to the personal representative and to the attorney) are paid from the estate; the amount is determined by law and is a percentage of the estate.

A bank account will be forced to probate court when someone dies and they haven’t named a beneficiary on death with their bank before they pass away. This prompts people to ask, “If I add my kid to my account, won’t I avoid probate?”.

We never recommend this because every day, we witness the pitfalls of probate clients who made this mistake. In many states, if you add a joint accountholder to your bank accounts, they are as entitled the the funds in this account as you are. This is true whether they are the source of the funds and they were the depositor or not.

This means that if they owe a creditor money, are going through a divorce or bankruptcy, or have a judgment (in some cases their spouse has a judgment), those funds are fair game! Your bank account can be wiped out overnight without warning. As an expert in asset protection, Attorney Haster attached to such bank accounts while pursuing joint accountholder on behalf of her creditor clients. She understands first-hand the perils of naming another person to a bank account.

To avoid probate without naming another person to as a joint accountholder to your bank account, we establish a living trust and name the trust as the beneficiary of death. This way we avoid probate court as well as all the pitfalls of adding someone to your account.

A question we get is, “If I add someone else as tenants in common or joint tenants to my deed, can I avoid my house going through probate when I die”? Our experience has shown that this is almost always a recipe for disaster.

With a tenants in common deed, each owner of the property has a separate ownership interest in the property so they can decide who inherits their share when they pass. However, this transfer isn’t as simple as its sounds.

With a tenant in common arrangement, when one inherits, they must first pay probate court costs in order to verify the will of the deceased before they can claim ownership of their shares. In addition, there could be unpleasantness between the surviving co-owner and the new co-owner if they disagree on how to care for the property, whether to update or sell the property and other issues.

Further trouble occurs when one of the co-owners is divorcing or has tax troubles and suddenly there are more legal headaches for the other co-owners.

To avoid these troubles, real estate should be transferred to a trust and the terms of the trust dictate who inherits while avoiding disagreements, tax problems, divorce and probate court involvement.