More than half the people in the United States die with no estate plan in place at all. Every estate, with or without a will, goes through probate if its value is at least $150,000.00. Probate in California is expensive, lengthy, and public. Putting an estate plan in place now means that you keep control over critical decisions that will need to be made when you die, or if you get sick -- especially if one of these things happen unexpectedly.
Disadvantages of probate
EXPENSIVE: Probate takes from 4-6% of the Estate's gross value. For example, a person dies with a home valued at $800,000.00 will pay $38,000.00 in statutory attorney and executor fees. The probate referee will value the house at fair market value at the date of death and, for purpose of the statutory fees, the amount accounted for is NOT reduced by a mortgage or other debt on the house.
LENGTHY: The minimum amount of time for probate proceeding is six months with an average time of 1.5 to 2 years -- time that your children and other beneficiaries can begin to utilize and enjoy your property.
PUBLIC: There is no privacy in a probate proceeding. the court file of probate proceeding discloses decedent's assets, debts, and disposition of assets. This file is a public record and is easily viewed by anyone who requests to see it.
hOW TO AVOID PROBATE?
The primary purpose of a living trust is to avoid probate. It also has other benefits.
NOT PUBLIC: unlike a will, a trust does not need to be filed with the court and is not a public document.
EFFICIENT: a trust can be highly customized to your needs, for example, manage property for children with special needs, minimize estate taxes, or skillfully manage the competing demands of blended families.
WHAT IF I GET SICK?
Establishing a trust and transferring your biggest assets to it also makes it easier for people to manage these assets for your benefit if you become incapacitated later on -- your successor trustee can step in to manage these assets for your benefit at that point.