![]() Trusts are much better than probate because they avoid delays, probate costs, publicity from probate and family disputes that often result from the court probate process that is required in nearly all U.S. The court orders the home sale proceeds to be distributed, and the children use the diminished home sale proceeds to continue their probate fight. Eventually, a real estate investor who has researched the probate battle in publicly available records swoops in to buy the real estate at a discount as the real estate markets continue to fall. In the ensuing probate court battle, the siblings expend tens of thousands of dollars on attorney fees for fiduciary litigation, ultimately delaying the sale of the home for several years. However, a younger sibling shows up to the appointment hearing and objects to the oldest child serving as executor. Real estate prices are falling at the time the probate is filed, so the oldest child is hopeful that the probate will go quickly, and they can sell the home. ![]() The oldest child is surprised to learn that a last will and testament must be probated, but ultimately engages the attorney to file a probate petition to appoint the oldest child as the personal representative (executor) to administer the estate. The attorney discloses to the oldest child that before they can lawfully sell the home, the parent’s last will and testament must be probated in a court action. The attorney discovers that the parent’s real estate was titled in the parent’s name at time of death. Parent dies, and the oldest child takes the parent’s last will and testament to an estate attorney to determine how to administer the deceased parent’s estate. The following example (which I wish were fiction) outlines some of the consequences of subjecting an estate to the probate process:Įxample. However, probate is required for the beneficiaries of many classes to obtain legal or marketable title - such as of investment accounts or real estate. Probate is a costly, public process that can delay the sale of real property for a year or more, make a family’s personal business public and provide a public court forum for the family to fight. In some cases, after the death of a real estate owner, a child will understandably not want to wade through the probate process. ![]() Most commonly, a court probate is required to transfer the title of real property that is titled solely in the name of a deceased person - even if the real property is going to be transferred to the child of the homeowner. The probate court process is required before financial property and real property held in the name of the deceased person can be retitled into the name of an heir, but probate is not required for property held in a trust to be transferred to the trust beneficiary. ![]() Sometimes the trust will hold the trust property forever, but most often, the trust agreement will require that the trust property, or at least the income from the property, will be distributed to the beneficiary upon occurrence of an event such as the trust maker’s death, or perhaps when the beneficiary reaches an age or stage in life, such as graduation from college.īoth revocable and irrevocable trusts are legal power tools that provide much more certainty for estate planning than does a last will and testament because they also avoid the need for a court process known as probate. The trust and the property’s titleįor either a revocable trust or an irrevocable trust to be effective, the trust maker (also called the grantor or trustor) must title property into the name of the trust, usually by naming the trust as owner of a financial account, or perhaps by filing a deed with a county recorder, naming the trust as owner of real property. In both revocable and irrevocable trusts, the trust agreement will name a trustee who has legal control and authority over the trust, and the trust agreement will also name a beneficiary who has equitable rights over the trust property.
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