How can a revocable trust or living trust protect the valuable assets you’ve worked to hard to build throughout your life and reduce or eliminate the expense and time associated with the process of probate?  Why should anyone who owns a home in San Diego, or throughout California and across the United States have a trust?

Assets which are not protected by a living or revocable trust must be taken through the process of probate before they can be distributed to heirs and beneficiaries. 

How expensive is probate?  

Let’s use a common example.  The median price for a single family home in San Diego is presently $850,000.  It is important to note that the costs of probate are based upon the value of the asset, not the equity in that asset. What would it cost to simply take this house through probate? The costs are surprisingly high:

4% of the First $100,000 of the gross value of the asset, or $4,000

3% of the Next $100,000 of gross value, or $3,000

2% of the next $800,000 of gross value (in this example, $650,000 remains), or $17,000

1% of the next $9,000,000 (does not apply in this example)

Therefore, it would cost your estate $24,000 just to get your home through probate, and that is without the fees for an executor, attorney or the Probate Court itself.  The process to take a home through probate usually takes more than a year.  How do you think that might affect your heirs and beneficiaries?

If the home in our example was simply placed in a living or revocable trust for roughly 10% of that amount, the house would pass to your designated heirs or beneficiaries immediately and without any probate costs or tax liabilities.

Imagine how this might impact investment accounts, collections and other significant assets.