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Another Trust question
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Posted by calirose (My Page) on Thu, Jan 21, 10 at 10:38
| Do all wills go through probate? If I have a pour-over will, do I need a trust? How much of an estate does one need before a trust should be made? |
Follow-Up Postings:
RE: Another Trust question
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| Not sure what a pour-over will is, but a will that leaves everything to the trust does not go thru probate. Best to check your state laws and consult the attorney who prepared your will. And better still, talk to an attorney who specializes in wills, trusts and estates. You might be able to google some of the information. My attorney advised us to put real estate into the trust and any bank or brokerage accounts or other assets over $10,0000. |
Here is a link that might be useful: If you are in Calfiorni, here's a link
RE: Another Trust question
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| It’s my understanding, in California, any estate over 30 thousand goes through probate. Without a trust the pour over provision in you will would have no meaning where would it pour over to? Deciding if you need, want, a trust is something you should talk over with a certified estate attorney. Besides avoiding probate there is the advantage of keeping your estate out of the public record and the time issue if you have the court involved. With a trust you still file the will with the court but all it says is everything is left to the trust. The co trustee, executer, then settles the estate. |
RE: Another Trust question??
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| The pour over provision in a will is just a simple statement that says if assets were not funded into the trust it was an oversight and all assets are left to the trust. So if for some reason you forgot to put something in the name of the trust it can still be put in the trust after the fact. |
RE: Another Trust question
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| So then does a pour over go into probate or not? It was suggested in my other thread about trusts that pour-over wills do go thru probate before they pour over. |
RE: Another Trust question
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| Not really sure how to answer your question but our attorney says anything not in the trust would go to the trust without probate he would just file papers when he files the will. Even with a trust you still have to have a will and the will should have a pour over provision. Maybe I don’t understand what a pour over will is but I know our wills have a pour over provision in them. |
RE: Another Trust question
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| A pour-over will is useless without first setting up a trust - I assume you are thinking of setting up a Revocable Living Trust. Such a will holds no instructions; it is more like an addendum to a valid trust. In our case, for example, the pour-over will will enable our on-line savings account to be kept within our RLT. The on-line bank was unable to title the account as a trust account (their own limitation), so the pour-over will therefore adds this and such things as personal property, to the RLT. A pour-over will does not go through probate. Current CA state law:
"Only if a decedent left the entire estate to a spouse, or if the entire estate is worth no more than $60,000, or if all of a decedent's property is held in joint tenancy or in trust, can the survivors avoid probate." |
RE: Another Trust question
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| Thanks JK it was 1989 when our first family trust was created and for some reason the 30 thousand stuck in my mind. I manage 3 family trusts and it does get confusing at times especially the accounting for the bypass but our CPA tells me every year how much to leave in it to minimize taxes. It’s almost that time of year again but after many years I usually have everything together for him. |
RE: Another Trust question
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| Thanks, I definitely see that each state has its own regulations and need to check locally. |
RE: Another Trust question
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| I found this information which seems to indicate pour-over wills are still subject to probate (see link below for more info: Though the property caught by a pour-over Will has to go through probate, it will eventually be distributed according to the instructions of the deceased instead of being distributed under the state law. This was on an IL specific site: There are three basic types of Wills that may be created: Outright Will. This type of Will is used when neither a living trust nor a testamentary trust is desired. It is "outright" because the Will provides for gifts to be made outright to the beneficiaries at death, rather than held and disposed of within a trust.
Will with Testamentary Trust. This type of Will may be used when one wants to leave gifts in trust, but does not desire to set up a revocable living trust. We rarely advise that clients use this type of trust because it is nearly as complex and costly to draft as a living trust, without the benefit of avoiding probate, both during incapacity and at death.
Pour-Over Will. This type of a Will is used in conjunction with a revocable living trust. It serves as a "safety net" for any assets not titled in your trust after your death and pours them into the trust to be disposed of within the trust. However, pour-over Wills, like all Wills, do not avoid probate if the aggregate value of assets passing by Will exceeds $100,000, or if there is any real estate ***
Sounds like all pour-over wills go through probate if I read those correctly. |
Here is a link that might be useful: http://law.freeadvice.com/estate_planning/wills/pour_over_will.htm
RE: Another Trust question
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| Yes, pour-over wills are wills, and all wills go through probate, except those excepted by individual state laws. (Usually very small estates are excepted or given a streamlined process.) Jkom51, that California law doesn't apply to pour-over wills, because the property covered by a pour-over will is *not* in the trust at the time of the decedent's death. In fact, that's why you make a pour-over will - to take care of anything you might not have put into your trust. Just FYI, I think attorneys recommend revocable trusts far too often, overstating the inconvenience and expense of probate to convince people to opt for these trusts. Before you decide to get one, I would ask the attorney about what it would be like to probate *your* will, not let him/her simply say, "It can take three years and cost $XXX to probate a will ..." Well, sure it CAN, but WILL it? |
RE: Another Trust question
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| I handled an estate in California that did not require probate. Except for about $10K in a checking account, there was about $200K in various accounts held under the name of the deceased's trust. I was able to pay all bills (I was also on the checking account), and pay out all money to the heirs without probate and with only the most minor of attorney fees ( a couple of phone calls for guidance). So not all wills are either recorded nor go thru probate. |
RE: Another Trust question
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| Yes, I mentioned that wills for small estates ($10K is quite small) are often excluded from probate. The $200,000 of assets in the trust account weren't part of the probate estate. |
RE: Another Trust question
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I don't know where you live. Each state is different, but I practice in California. I am an attorney, this is my area. I agree that too many people have trusts but often they get them through their "financial advisers" or because they went to some seminar that really just wants to sell them annuities.
There is no general rule about when to get a trust; if you both were married before or have big estates its certainly a good idea. Then you would also have a pour over will which can give non-trust assets to the trust if their total is less than $100,000. That doesn't go through probate. Insurance with a beneficiary doesn't go through probate. Joint tenancy doesn't go through probate. Pay on death bank accounts don't go through probate.
If you aren't married there is a lot to be said for doing at least a will. If you are living with somebody and not married I recommend you make sure they do a will. Often somebody comes into my office because the person they have been living with for 25 years has died without a will; the house was in his name but they have both been making payments. Its always a sad surprise for these people to hear there is no common law marriage in California.
Sushipup evidently did a good job as trustee of the trust. she did what she was supposed to do--pay bills and distribute the money.
Do you have any idea how many trustees have to be dragged into court years later because they have not distributed the money or the property? I have seen people who prepared their own trusts, appoint as a trustee, their son who was just out of rehab. One of the problems with trusts is that there is no supervision--nobody to answer to, and there is embezzlement. In probate court the judge can order an accounting, can order that money for a child be put into a special account etc. So I don't recommend a trust if you have nobody who is honest and trustworthy enough to distribute the money fairly. |
RE: Another Trust question
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RE: Another Trust question
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| marge727 points out a very important issue that too many people either forget or ignore: the disposition of their estate is dependent upon the honesty and efficiency of the agent designated to distribute the assets. So many people make the 'obvious' choice instead of the thoughtful choice. My in-laws were talked into a trust even though they have only one child/heir. It was unnecessary, although fortunately their RLT was a non-standard customized document that: 1) guessed correctly on future tax laws, and 2) entitled my MIL to access the principal of the Decedent's Trust. We have a trust for several reasons, not the least of which is that we have no children or direct heirs. In our state, probate of even simple estates takes considerable time. My sister's estate, simple personal property without any RE, took over a year to settle. It was a cumbersome and unpleasant task to be the executor. Our trust is set up to pass assets to our chosen heirs in a direct and efficient fashion. It's specifically customized to allow for certain non-standard provisions that we wanted. If you are just passing moderate assets from spouse to spouse, or to one or two children, in most instances I think a will would be far more cost efficient than a trust. But you have to always remember that an executor OR trustee has a fiduciary responsibility to the estate - therefore, if you are naming someone who will have a financially difficult time administering your estate, you might want to rethink either your choice of agent, or the process by which your assets will be distributed. |
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