Estate Planning 101: I Already Have a Will … Why Do I Still Need a Living Trust?

If you have a properly executed will, then you are ahead of the majority of Americans who neither have a Will nor Living Trust, let alone a basic estate plan.  The Shirvanian Law Firm, APLC is often times asked whether a Living Trust is still required if one has a Will.  Good question.

This article begins with the definition of what an Estate Plan is.  Simply put, a basic Estate Plan consists of the following legal documents: (1) Living  Trust,  (2) Testamentary Will, (3) Medical Directive, and (4) Power of Attorney.  These documents comprise the basic “plan” and will control the distribution of your assets upon one’s passing.

First and foremost, the general answer to the above-entitled question is, yes.  A Living Trust is still generally a required document in an Estate Plan for the main reason of avoiding the costly and time-consuming process called Probate.  In California, as a general rule, most estates will have to go through the Probate process unless one’s assets were placed into a Trust or fall into limited situations where Probate is avoided.

Avoiding Probate is a very good thing for the following reasons. First, Probate is time consuming and often times takes a very long time to have the assets in the decedent’s estate distributed.  Second, Probate is costly as Attorneys’ Fees are statutory and are codified in California Probate Code Section 10810.  For example, statutory Attorneys’ fees on a million dollar ($1,000,000.00) estate, taking into account the gross value excluding mortgages and debts, would total approximately $23,000.00. These costs can be avoided if the estate was governed by a Living Trust, which costs significantly less to prepare.

Other benefits of having a Living Trust and thereby generally avoiding the Probate process are maintaining the privacy of your family’s estate and the distribution of those assets.  Because Probate is a Court supervised legal process, all probate documents are filed with the Court system and becomes part of the public record, which anyone can gain access to.

If you have any questions about this article or how the firm can assist you in preparing an estate plan to suit your needs, please contact the firm at (818) 835-5396.

Comments are closed.