This article will discuss whether a Will is enough to avoid probate. As you will see below, the simple answer is, no. A will does not avoid probate. A will guarantees your family foes through probate. Luckily there are solutions available that can help you and your family avoid the probate process.
The period of transition following a bereavement can be a frustrating one for many reasons. Dealing with grief in the aftermath of your loved one’s passing takes time. The last thing you want to be is inundated with pressing legal and financial issues. But this does seem to be the case more often than you would care to think.
All too often, one of the biggest sources of unnecessary aggravation is the contention that may arise over the disposition of the deceased family member’s estate. Unless there is some planning done before death, the disposition of a deceased family member’s estate will go through the probate process. This is a source of discord that can cause litigation and ill feelings for many years to come. The best way of avoiding it will be discussed below.
There are many reasons you may want to avoid probate! It is expensive, it takes too long, and leaves your family unprotected. This post is not about why you should avoid probate. It assumes that you already want to avoid probate.
If you are left wondering, well what is probate, and why should I avoid it? Check out this article I wrote: What is Probate and Why Avoid It?.
For now, let me use the simple and wonderful definition I heard from another great estate planning lawyer, Philip J. Kavesh, who said that “Probate is a lawsuit you file against yourself, with your own money, for the benefit of your creditors.” Who wants to sue themselves? Practically no one.
Does a Will Avoid Probate?
One of the most persistent questions that our staff gets asked on a regular basis is, “Can I avoid probate by setting up a will?” The answer may be yes, but only in a very limited and unenviable situation. To understand this, you need to understand that the California Probate Code mandates probate for any estate where any one of the following is true:
- The estate has real property AND does not exceed $55,425 in value.[i]
- The gross value of the real and personal property of an estate does not exceed $166,250 in value.[ii]
Every other kind of estate MUST go through probate.
Thus, if your loved one has a will and the estate falls into one of the categories above, then the estate will avoid probate. But not because of the will. The estate is simply too small to go through the mandatory probate process.
If the estate does NOT fit into one of the categories above, then even if you have a will, you must go through probate.
But, in general, the answer to this question will be no.
At this point you may be wondering, why would a trust avoid probate, but not a will? Here are some brief responses:
- A trust is only a tool that helps you avoid probate because a trust is a separate legal entity under the law.
- When a person dies with a fully funded trust, that person does not actually own the property in that trust.
- The property is, in fact, owned by the trust.
- Thus, at the time of death, there is no actual property in the person’s estate to be probated.
Leaving a Will Actually Tends to Guarantee the Probate Process
In most cases, leaving behind a last will and testament for your loved ones actually tends to all but guarantee that your estate will have to go through the long and expensive probate process. This will be true for at least a part, if not the whole, of the estate that you leave behind to be distributed.
The reason for this is because probate essentially breaks down to the process of authenticating, first, that a legally binding will exists. In other words, the probate process allows for the family members to present any evidence that the proposed “will” is not the true and most recent will of the person who died.
Once the will is “proved,” i.e., once the court determines that the will is authentic, the will is admitted to probate. The probate process then governs the process of paying the creditors, distributing all of the assets of the estate according to the terms of the will.
A Will Can Be a Valuable Means of Minimizing the Risk of a Prolonged Probate Process
Probate is a very long process. The shortest probates last at least a year. But the longest probates often involve large family disputes over what they believe their loved one would have wanted.
Having a well written will can help avoid some of these prolonged disputes by stating very clearly what you want and where you want your estate to go. But, even the best written wills still require months and even years to complete the process.
You Can Take Advantage of Small Estate Provision Laws
As noted above, some states will allow you to avoid the probate process under one essential condition. This is if the estate that it is left is under a certain amount in value. This exemption is designed to cover estates that are simply too small to bear spending the amount of time, energy, and money it would cost to probate them.
This exemption can also apply if the estate consists largely or solely of certain types of property. The exact type of property will vary from state to state. It can also be applicable if the whole of the estate is designated to be left to a surviving spouse.
Setting Up a Living Trust Can Help You Avoid Probate
A living trust can often form the best means of avoiding, or at the very least, minimizing the probate process for a large estate or an estate with a great many beneficiaries. In order to circumvent the process of probate, you and your lawyer will create a type of living trust that is usually known as a revocable living trust.
Now, some discount estate planning lawyers will stop at this point. But that is not enough. In order to avoid probate, you also need to fund the trust. That means you need new deeds for your home, and you need to re-title your assets so that they are owned by the trust.
This way, on your death, there will be no asset left in your estate, thus you will avoid probate.
But, on the off chance you forget to fund the trust, a living trust will still help shorten the probate process. If you have an unfunded trust, then after you death, the trustee can file what is called a “Heggstead” petition, which asks that the court allow the trustee to fund the trust after the person died. This can take a few months in the probate court but is still cheaper and less time consuming that a typical probate.
How Do You Create a Revocable Living Trust?
Creating a living trust is actually pretty simple. Do this exercise.
- Take out a piece of paper.
- At the top write “Living Trust of [Insert your Name]”
- Next, write the following phrase: “I, [Insert Your Name], own property which I hold in trust for my benefit and the benefit of my beneficiaries.”
- Next write “I am the sole trustee of the trust, but on my death, I elect [Insert Name] to be my successor.”
- Next, write “on my death the trust estate shall be split equally between my beneficiaries.”
- Then write: “My Beneficiaries are [Insert Names and dates of birth].”
- Finally, write “this trust shall be known as the [insert your name] Family Trust.” And sign the paper.
It is that simple. But would you trust this kind of trust (no pun intended)? Probably not. There are so many other variable and situations that go unaddressed. What happens if your beneficiaries die before you? What happens is a beneficiary is under 18? What happens if a beneficiary has special needs? Is the trust revocable or irrevocable? When can it be revoked, and who can revoke it?
Even though a trust can be as simple or complex as you need it to be, creating a good living trust is actually the result of a series of specialized planning choices. That is why it is a good idea to work with an experienced and knowledgeable estate planning attorney to draft this kind of estate planning tool.
When choosing an attorney for this kind of thing, you should look for an attorney who focuses exclusively on estate planning. You do not want an attorney who just does estate planning “on the side.”
Next, you want an attorney who has a plan for all types of planning situations: families with young kids, blended families, estate with no children, pet trusts, disinheritances, etc.
Finally, you should think about whether the attorney you hire will help you communicate the non-monetary aspects of your legacy – your moral legacy. Your beliefs, hopes, experience, and values.
Finally, you want an attorney who will help you fund the trust.
If you live in Southern California, I own an estate planning firm called Regnum Legacy, feel free to give us a call.