So here's a question I get all the time, Richelle.
Should I set up a living trust or should I just go with the will?
And the answer to that question all comes down to one word, probate.
How do I avoid probate?
Now, probate is just a court process where a judge oversees
the distributions of your asset.
So normally, when you do a will, you're going to put together a document
that basically has all of the instructions of how to distribute your assets,
whether it's cash,
whether it's a cars, property, you know, businesses, what have you.
You bought all of these assets and your wills are a set of instructions
that an executor
will make sure gets executed and delivered to the proper people in probate.
A judge needs to oversee that process and do a final approval
before all of those assets can be distributed.
Now, here's the problem with probate.
It's a government agency
that's overlooking and overseeing the execution of your will.
So what does that usually mean?
Well, it means it's going to take a long, long time.
Number one.
So one of the biggest issues with probate and it typically takes 12 to 18 months
for a relatively simple probate procedure to go through the courts.
So as soon as you pass away, your errors are not going to get access
to whatever cash you want to give them, the properties.
It's going to go through this process and it's going to take
12 to 18 months of it's simple.
And if you have property in different states,
you have a little bit of more of a complicated estate plan,
then that number can go much higher and it can take up to a couple of years
to get through the estate planning process.
Now, if you've got properties in multiple states,
you're going to have to open up a probate in every single one of those states.
So as you can imagine, it's just a really drawn out process.
And so that's one of the main reasons you want to avoid probate,
is it just takes a long, long time and puts additional stress on your heirs
because they're not going to get your assets
as soon as you pass away because it takes so long.
The second issue with probate is it is expensive.
Your paying or your estate, your errors out of your estate are going to be paying
for all of the attorney fees or court appointed attorney fees.
They're going to be working on your case, plus all the court fees.
And so a lot of the assets get eaten up in attorney fees.
And I don't know about you guys, but most people
don't want to pay attorney fees if they don't have to.
And so avoiding probate also avoids the expense of attorney fees.
And the last reason you don't want to have probate is
that it's not a private system, it's public, it's the courts.
And so everybody and their mother is going to know what assets you have,
what agreements you have,
who gets what and where, and it becomes a public document.
You guys have probably remember some of these famous celebrities
that you would thought have had some kind of a
a will or I'm sorry, some kind of a living trust like Robin Williams comes to mind,
You know, a really well-known comedian.
He passes away, doesn't have a living trust, just has a will.
And all of that information is available to the public.
So you lose all sense of privacy.
It takes forever to get the money, and it's expensive.
That's why you generally want to avoid probate.
So how do you avoid probate?
Well, the way that most people do it is through what we call a living trust.
So when you set up a living trust, a trust is a separate legal entity
that separate from yourself, that has the trustees
that are kind of the sort of the equivalent of managers of an LLC.
They're the trustees of the people that control the trust.
And there are beneficiaries which are going to be your heirs.
And so this is something that is set up while you're alive.
It does cost a little bit more money, a little bit more expensive than a will,
but at least you're not leaving or burdening your heirs
with the cost of dealing with the ramifications if you pass away.
So what happens with a trust is while you're alive,
you're going to be the trustee or you and your spouse is going to be the trustee.
But as soon as you pass on, you're going to leave instructions
as who is going to be the successor trustees
who are actually going to make sure
that the assets that are located in the trust get distributed
to the proper people.
And of course, beneficiaries are typically going to be the people
that you want to leave your office to, whether it's your children, your spouse's,
your parents, those are going to be the beneficiaries.
So so when you pass, when you die, there is no probate.
So literally the day after you die, the trustee, the successor trustee
that you've nominated can actually go through
your will and go through whatever's inside the trust and follow the instructions
of the trust and distribute the assets to your heirs immediately.
There's no delay.
There's no waiting 18 months.
There's no expense of attorneys there.
The trustee is basically going to distribute the assets
pursuant to the instructions that you've left.
Now, we're not going to go through the details of what can be inside of a trust
in this particular video, but you can really be as creative
as you want to be in terms of how you leave
your access to your heirs, whether that's going to be the actual property in-kind,
whether that's going to be cash, whether that's going to be all at once,
whether you're going to piece it out, especially you have children.
Maybe you don't want to give all of your assets to your children right away.
You give some of them now, some of them when they get older.
So there's all kinds of ways,
creative ways that you can draft your trust, your trust documents.
But the important thing to understand is that when you set up a trust,
you are avoiding probate and making the whole process for your heirs much simpler.