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Is probate necessary? No. Entire countries have completely eliminated it. Do our best legal minds (even the middling ones) think we need it? No. So why do we have it? It is an easy-money, billion-dollar industry run by lawyers. Good luck getting rid of that one. It gets even worse. The probate empire has spawned the secondary industry of avoiding probate. Recently I went to a slick presentation by a living trust lawyer. He was a master of his craft (that craft being the selling of his wares). He had the presentation in an expensive hotel, with catered hors d' oeuvres. His secretary made every effort to get clients' contact info on the phone before (RSVP requested), then at a sign-up in front of the lecture hall, then on a “discount” form in the informational packet. And then begins the graduated sales pitch for the discounts on the lawyer's living trust packages. It was well crafted and relentless. It was the Music Man on steroids, an object of beauty. But was this really something on which you needed to spend thousands of dollars? In most cases, no. According to Nolo (the do-it-yourself legal guides), you should try to avoid probate, but you can usually do it yourself without an expensive lawyer.
So What's Probate?
“Probate” has three meanings: 1) to verify the validity of a will 2) the process of doing just about everything that has to be done for an estate after someone dies 3) the name of the court that deals with estate matters. Couple of good resources to explain more: Wikipedia on probate (read beginning and United States section), and the legal dictionary section of thefreedictionary.com
Why Should I Avoid Probate?
Probate can be expensive, after lawyer and court fees are added up. It is also often time-consuming. It may involve unnecessary publicity (including of your assets). It may unnecessarily involve court appearances.
What is a Living Trust?
A living trust, also known as an “inter vivos trust,” is a trust set up while the Grantor is still alive. The Grantor creates a living trust (which should contain title to all their assets) to avoid the expenses and delay of probate. Upon the Grantor’s death, all assets in the trust are automatically, without court supervision, transferred to the people or organizations chosen by the Grantor.
Note that a living trust is different from a “living
will”, which is another name for your end of life directive
or advanced directive, a document that gives instructions on
what treatments you want, and more often on whether or not
you want life-prolonging medical treatments or
interventions, in the event you are terminally ill and no
longer able to communicate.
Should I Always Avoid Probate?
No. In some states, if your estate is not worth much, forget about the hassle of avoiding probate. It can be a simple, brief appearance by a family member in front of a judge. In a different situation—for example if there is no will, or if family members or business partners disagree about the will—it can be a very expensive, protracted process, so check with a local lawyer. Some states are known for protracted probate processes, so it’s helpful to know the situation where you live.