I have been asked many times-“Why do I need a trust?” There are many reasons to set up a trust during your lifetime. Answer Number 1, which is probably the most common, but not necessarily the most important reason given, is that it can achieve the result of avoiding probate.
Many people have a “fear” of probate because of all the apocryphal stories they have heard regarding the cost of probate and the delays it entails in the administration of estates. Since the advent of independent administration, however, the costs of administering a probate estate have been greatly reduced along with the paperwork and delays involved.
Now to the Answer which can be told by relating a true story. Several years ago I drafted a trust for an elderly couple. I advised them at the time that all of their assets must be transferred to the trust (except for their checking account and other assets of minimal value) in order to effectuate the avoidance of probate. I shepherded the transfers and they were completed. (In many cases, people establish the trust, but fail to follow up with the transfers of assets, which defeats the purpose). The couple’s family expressed unhappiness about the additional cost of creating the trust and doing the transfers, to which I responded that the overall costs, not to mention the delays of postmortem distributions would be substantially reduced. Recently, the husband died and one of the couple’s children called me to inquire regarding the legal and administrative costs that would be incurred. When I told her that practically nothing had to be done and that she could handle virtually everything without an attorney, she was, to say the least, very happy and I was redeemed.
If you would like to discuss setting up a trust for yourself or a loved one, please feel free to call me at 312.236.7005 or email firstname.lastname@example.org.
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