Avoiding Formal Probate
Probate is not especially expensive, nor does it save on taxes. If you heard others say that you should avoid probate because it is expensive and saves on taxes, this is not true. At least it is not true in New Jersey. (See You TubeĀ video made by popular TV star and financial advisor, Suze Orman on Living Trusts.) The cost of probate is greatly exaggerated. But, there are many other valid reasons to want to avoid formal probate. These reasons include:
- Assets tied up waiting for Estate Tax and Inheritance Tax waivers.
- It may be unfair to favor one of your children by giving them a 5% executor’s commission on the total value your assets.
- Your competency is less of an issue with a Living Trust than it is with a Will because you put your assets in a Living Trust while you are alive and your competency is easier to establish.
- We can work with you while you are alive retitling assets into the name of the Living Trust. In fact, those services are included in our flat fee.
- Avoiding probate gives you greater control over your assets after you are gone, since you will be allocating them during your life.
- A Living Trust is typically much more detailed about your specific wishes.
- There are fewer challenges to Living Trusts than with probating a Will because you put your assets in a Living Trust while you are alive.
- Your named executor is very likely to be inexperienced as an executor and may make costly mistakes in the administration of your probate estate.
- Probate is difficult to understand. To the inexperienced, probate seems more difficult than it may seem to an attorney or someone with experience in the world of finance.
The single most common complaint I receive is from a brother or sister complaining that the executor is taking too long, or is “not doing anything.” The reason for this complaint is that it probably is taking too long, and that nothing is being done. When any of us are given a task that (1) we don’t understand, (2) we have never done before, (3) we don’t know how to do, (4) we are not given clear instructions on what exactly should be done, (5) we didn’t want to do in the first place, (6) for which there is no urgency nor time constraints, (7) while we have plenty of other more important and urgent matters to take care of each and every day (e.g., work, kids, health issues, financial issues, etc.), what happens? The answer: WE DON’T DO IT! We don’t like it, we don’t know how to do it, and it’s not urgent, so we put it on the list of things to do on a day when I have nothing else to do, which day never? comes. In my opinion, this is the single most important reason to avoid probate.
By setting up a Revocable Living Trust YOU can take charge of your own affairs, and do while you are alive and well, almost all of what would need to be done by your inexperienced executor after you have expired, stumbling through the probate process.
This is what we accomplish for you in our Avoiding Formal Probate Program.