Tillem & McNichol

Len Tillem and Rosie McNichol

Dear Len & Rosie,

My husband and I met with an attorney who specializes in creating wills and trusts. We have no children and don’t intend to have children.

The attorney said that we didn’t need a trust because we don’t have children and all of our property is community property anyway.

Is there any reason that we need a trust? When one of us dies, will anything we possess go into probate?

In casually speaking with other attorneys, they indicate that we need a trust.

Patty

Dear Patty,

The lawyer has a small point. In your case, there should be no probate on the first death.

Your life insurance policies and retirement accounts will pass outside of probate to the survivor between the two of you if you name each other as primary beneficiaries. The rest of your assets will also avoid probate on the first death if you hold title to them as joint tenants or as “community property with right of survivorship.”

If your husband dies owning assets in his name alone, there may be a probate. But if he has a simple will that leaves everything to you, you can avoid a full probate by filing a spousal property petition with the court.

The only time a probate would be needed upon the first death is if the deceased spouse leaves more than $150,000 in assets to someone other than the surviving spouse, which in your case isn’t very likely.

The benefit of a revocable trust will be seen only after both you and your husband have died. Then, the assets held within your trust will avoid probate.

The point behind the advice your lawyer gave you was that if you don’t have any children or close loved ones, the need to avoid probate may not be enough to justify the cost to you of creating a trust.

Probate isn’t evil. It’s just costly and time-consuming compared to the alternative of creating a trust.

A typical probate can easily take from one to two years to complete, and probate lawyer fees, set by state law, are a lot more generous than the fees lawyers get for helping to administer trusts. But the cost and time delay of probate will happen only after your deaths.

In choosing whether or not to create a trust, you need to think about the persons and organizations to whom you wish to leave your assets.

If you are leaving everything to charity, then maybe wills are all that you need. Charities are in it for the long haul, and can usually wait a few extra months to receive a bequest.

On the other hand, if you are planning on leaving your assets to relatives and friends who really need it, then the additional cost of creating a revocable trust may be justified.

It’s up to you. You and your husband can distribute your assets with wills in exactly the same way as with a trust, except that wills do not avoid probate, so in the end it will all work out the same.

Len & Rosie

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at 707-996-4505, or at LenTillem.com. Len has a new video channel on YouTube.

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