A simple will may be sufficient if your assets are under $100,000 and you do not anticipate them growing beyond that amount before your death. With assets under $100,000 your estate would not need to be probated. You will be able to determine who gets what upon your death. A will can be changed any time before your death.
Top 7 Reasons Why a Will is Probably Not Enough
1. A will is a guarantee of probate
If you die and have a will, but not a Revocable Living Trust, your executor must petition the court to begin probate proceedings, in order to transfer or sell assets, for any estate over $100,000.
2. Probate is expensive
One of the biggest differences between a Will and a Revocable Living Trust is the way lawyers get paid after someone dies. Probate costs are paid from your estate, as a percentage of your estate, and are statutory under the California Probate Code. Your estate includes the full appraised value of your home, your life insurance benefits, all your financial assets, and your business if you are self-employed. Probate fees start at 8% of the estate, going lower on a sliding scale, but adding up to significant amounts on larger estates. With a Revocable Living Trust there is no fee structure set by law, which means your heirs will pay attorneys much less to settle the estate, as they will be able to negotiate fees, typically 1% or less of the estate.
STATUTORY PROBATE FEES FOR ADMINISTRATION
| || |
| ||Value of Estate ||% of estate in fees ||$ fee|| |
| ||$100,000 ||8.0% ||$ 8,000|| |
| ||$500,000 ||5.2% ||$ 26,000|| |
| ||$1,000,000 ||4.6% ||$ 46,000|| |
| ||$3,000,000 ||2.9% ||$ 86,000|| |
| ||$5,000,000 ||2.5% ||$126,000|| |
| ||$10,000,000 ||2.3% ||$226,000|| |
| ||$15,000,000 ||1.8% ||$276,000|| |
3. Probate is a lengthy process
The court process usually takes at least nine months and can take up to two years or longer. During much of that time assets are frozen. Most personal representatives will not distribute property until they are positive all claims have been settled, as they are personally liable to creditors if distributions are made before 12 months pass. In a declining real estate or stock market this can add another huge expense of probate.
4. Probate is public
Any “interested party” can get details about your estate, including what heirs will receive and their addresses, as it is all public record. This can lead to unwanted solicitations. Any disinherited relatives are invited by the court to contest the will, and the court decides if they will get anything.
5. A will does not cover incapacity
If you become incapacitated, say due to an accident, a stroke, Alzheimer’s, etc., no one will have authority to make your financial decisions. A will does not go into effect until the person dies, so the executor has no authority to pay your bills or sell your assets. Someone will need to petition the court to hold a public hearing to declare you incompetent and appoint a conservator of the court’s choosing. It is an expensive process- court costs, medical exams and testimony, attorney fees. If you recover you will have to prove your competency to the court to take over your financial matters. And if you die, your family will still have to go through the additional expense and hassle of probate.
6. A will does not provide well for your minor children
Even though you have named a Guardian for your children in your will, a will must still be probated. The court then controls the inheritance of the child until they reach legal age. They will require an annual accounting of all their expenses, requiring an accountant to prepare the accountings and a lawyer to file them. Then the child receives 100% of their inheritance when they turn 18, prior to having financial maturity. If you become incapacitated, chances are both you and your minor children would be placed under the control of the courts.
7. A will is among the most contested legal documents in the United States
This results in higher attorney fees and more delays. When a will is probated all heirs must be notified and given a chance to review the will and the inventory of assets.