Why so Many Families with Living Trusts End Up in Probate
One of the main reason’s families set up living trusts is so the kids won’t need to hire a lawyer and wait for a probate court to order distribution of the family home and other assets. Probate is expensive and the cost goes up with the value of the house. The median value house in Reno was a record $500,000 in December 2020, according to the Reno/Sparks Association of Realtors. Attorney fees in Nevada probate cases are controlled by statute. Applying the statutory formula your children can expect to pay around $13,000 to probate an asset of that value.
The cost of creating a living trust, however, is a fraction of the expense of probate. The price of failing to put the home and other valuable real and personal property, however, may be the cost of probate. This is because real property that qualifies for probate must be transferred to the trust to avoid probate.
Failing to transfer property to the trust is one of the costliest and most common mistakes families make in estate planning. A caring attorney will work with the client until satisfied that all probate triggering assets are placed in the trust. The attorney should also ensure the client is aware of the pitfall of property left outside the trust and seek assistance in the transfer as needed.
Real estate agents and brokers are also becoming increasingly aware of the implications of leaving property outside the trust. Some agents are up to speed and routinely recommend to their clients that they consult an attorney about the inevitable succession of their real property.
Most attorneys will transfer the family home to the trust when the trust is created. Often families subsequently acquire additional properties and neglect transferring them to the trust. When the last person on title dies, the only way to transfer the property is generally through probate. If the real property is located in another state, a probate must occur in that state. If you purchased a canned trust package online, buyer beware of these considerations.
Probate courts are seeing more cases of this type of as living trusts have become the preferred method for the family transfer of wealth. If you have a living trust make sure your assets are transferred to the trustee of the trust. If you do not know how to do this refer to the Affidavit of Trust Certificate or trust agreement itself. These documents should provide the name for titling the asset. If you are unsure how to transfer property, or whether it should be transferred, you should pay for the help of an attorney.
The livingtrustsource.com recommends that families with a living trust review titles to all assets over $25,000, or have potential to grow past that value, to determine if they are held in accordance with the trust agreement.
Attorney at Law
1Source Law & Living Trust Source