by Renato Aguirre

Created on: May 02, 2007   Last Updated: May 17, 2007

Your death in the United States comes with harsh consequences to those you leave behind besides the lost of their love one. There is the so-called death tax that is owed by your beneficiaries within 1 year of your death. But no less foreboding is the issue of probate, the process where your state court determines how to distribute properties you left behind.

There's a common misconception out there that the only thing you need is a will. The reality is that a will helps, but it is not enough. A will guarantees probate and it helps the judge administer over the proceedings. If your will is valid, the judge will use it to determine who gets what.

But there are problems with letting probate determine what happens. During probate, all your assets are frozen and many issues arises from this consequence.

PROBATE PROCEEDINGS ARE PUBLIC

Probate proceedings are a matter of public records. So there is a privacy issue. With electronic databases being used nowadays, state courts routinely publishes digital records that can be accessed online. Almost anybody can see who gets what from your death. So don't do anything that may embarass your spouse if you love him/her.

Living trusts are private. Establishing one will allow your executors to distribute your properties without having to file public papers.

PROBATE PROCEEDINGS TAKES A LONG TIME

Probate proceedings can be lengthy. In California, because of case overload, a typical probate takes about two years to complete. Your file waits in line. Now, remember the so-called death tax? It is due within 1 year of death, more like nine months. The death tax is collected by the IRS. They do not wait for the state courts to finish probate before collecting the death tax. Beneficiaries are often in a nightmarish position of having to come up with the tax money, sometimes from their own pocket because your assets are locked up in probate.

A living trust will allow your executor to complete the distribution of your assets as fast as she could. There is no waiting in line.

PROBATE JUDGE DETERMINES WHO GETS WHAT

If you die and don't have a will, the judge will determine who gets what. If you have a will, the judge will use it to determine who gets what. Either way, there is an issue of control over your assets upon death.

A living trust is not even seen by the judge, unless contested by a quarelling beneficiary (there are ways to deal with them too). If not contested, your executor will simply follow your instructions on who gets what.

CONCLUSION

You worked hard all your life to accummulate wealth. You did this to improve your life and your families. The question of getting a living trust or not can best be reworded as follows: Who's plan is better the government or yours? You pick.

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