This is the final post in a three-part series that started out explaining some facts about the probate process.
To recap, if you were to use a will to state your final wishes, generally speaking, the executor would admit the document to probate. Subsequently, the court would supervise the administration of the estate.
The heirs would not be able to receive their inheritances until the estate was probated and closed by the court.
Sometimes, the probate process can take up to nine months at a minimum. Costs add up during probate, and this money essentially comes out of the pockets of the inheritors.
Since probate is a public proceeding, anyone that wants to find out how the assets were distributed can access records to get all the details. This loss of privacy in and of itself is disconcerting, but the information can potentially cause hard feelings among interested parties.
Another negative is the fact that probate opens up a window of opportunity for disgruntled individuals that may want to present estate challenges.
There are some probate shortcuts that exist under California state laws. Even if a will is used, if the assets that are being transferred do not exceed $150,000 in value, it is possible to avoid the full probate process. Another shortcut exists for surviving spouses.
Revocable Living Trusts
You can intentionally plan your estate with probate avoidance in mind through the creation of a revocable living trust. With this type of trust, you would maintain total control of the assets, because you could act as the trustee and the beneficiary while you are alive and well.
After you are gone, a successor trustee that you name would follow your instructions and distribute the assets to the successor beneficiary or beneficiaries outside of probate.
In addition to the probate factor, there are other benefits that go along with the creation of a revocable living trust. When you understand all of them thoroughly, you will see that this type of trust is probably a better choice than a last will in many ways.
Heggstad Petition
Now that we have set the stage appropriately, we can get to the point of this post. In a perfect world, formal ownership of property must be transferred into a living trust. The property would actually be titled to the trust rather than the individual that was the grantor of the trust.
However, we do not live in a perfect world, and sometimes there can be property that should be in the trust that was never actually conveyed into it. In some instances, this property will be listed on a signed schedule of assets earmarked for the trust.
Whether there is a signed schedule or not, if the grantor wanted certain assets to be in the trust, but they never got around to changing formal ownership, the beneficiary would have recourse. A Heggstad petition could be filed, and this action would prevent the initiation of a probate proceeding. If the court grants the petition, the assets would be looked upon as trust property, and they would be distributed accordingly.
There is another document called a pour over will that you should include when you have a revocable living trust. This type of will would allow the trust to absorb assets that were never conveyed into it after your passing. The downside is the fact that the probate process would enter the picture if you use a pour over will.
Schedule a Consultation Right Now!
Our doors are open if you would like to discuss your estate planning objectives with a licensed attorney. We can sit down with you, gain an understanding of your situation, and help you make fully informed choices. You can send us a message right now to request a consultation appointment, and we can be reached by phone at 310-337-7696.
Cesar has received his Masters of Science in Integrated Design, Business and Technology from the University of Southern California.
