The Necessary Steps In Avoiding Probate

Losing a loved one will happen or will happen to us all. Sometimes it is expected and sometimes it is even a relief, if the person has been ill a long time. However to lose some one near to you suddenly and without any time to prepare yourself emotionally can be devastating for the ones who are left behind. That person who was so much a part of your daily tapestry has gone and never to return. You will see the physical presence all around you, their clothes, their favorite reclining chair, and the manifestations of their daily life.

People will tell you that life has to go on, and it does. Then you discover that your loved one hasn't taken care of their affairs as well as they should have, and have died without leaving a will, or without establishing a living trust. This is a very difficult and harrowing situation, involving intervention of the court system and a long drawn out and costly experience.

This difficult experience is entirely avoidable. Any person who has assets and wants to take care of his loved ones after they have gone and avoid their families being dragged through the courts as victim of the outdated and cruel probate system should make sure that they have at least prepared a living will, and investigate the feasibility of establishing a living trust, even though that person may be staring a long and healthy life straight in the face. No one can really know when disaster might strike.

Many people, especially younger ones who are just taking their first steps of being the head of a family, and are unaware or shy clear of their responsibilities, might agree that preparing a living will might be a possibility, but put it off for the time being. If you mentioned establishing a living trust, they would probably laugh in your face. Sadly the mistake that people make is that they do not realize firstly how much their estate is worth and secondly how little it has to be worth in order to be liable to pay estate tax in the event of death. No matter how sudden and tragic it may be.

What many people are unaware of, is that in today's internet world it is a very straightforward process to draw up a living trust. Today you can purchase ready made living trust kits at a fraction of the costs of visiting a lawyer in their office. All that is required is to fill in all the details, name your beneficiaries and have the document signed and registered by a notary public. More and more people are adopting this step, and realizing how simple yet important that it is in protecting their loved ones. In most cases the sole asset in the trust in the family home. In the beginning the house will have a reduced value and minimal equity. There may be cases that when the estate is wound up, the trustee discover that in any event there were insufficient assets to be liable to pay estate taxes. However probate has been avoided, and that alone was worth the investment.

However over the years the house will rise in value and the equity increase, till the house alone may well take the family over the threshold of liability to pass estate taxes. The house owner or owners can establish a mutual living trust. This form of living trust will clearly lay out important issues regarding the estate and its assets; how the property and assets of the trust will be managed while the trustors are still alive, and how they will be distributed after the trustor or trustors pass away.

The living trust can only contain assets and property that has been assigned to it legally. A revocable living trust can be update constantly. However any property that is outside the trust on the day that the trustor passes will be subject to probate.