Why is avoiding probate using living trusts so popular?
First, what is probate? When someone dies and leaves their property to someone else in a will, it is necessary in most cases to go through probate. For example, suppose someone dies with a will and leaves it to his son. The son goes to the bank and the bank says, "In order for us to give you this account we have to have your father's signature," and the son said, "Well that's going to be a problem because my father is deceased," and the bank says, "Well we still can't give it to you because the account is in your father's name, not yours. In order for us to give you this property, this asset, we are going to need a court order." The process of getting that order from a court is called probate.

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The reason why people like to avoid probate is because, number one, probate is very public. Not very many people would want their personal financial affairs to be posted at the courthouse bulletin board for everyone to see. Anyone can go down to the courthouse (in Chicago it's at the corner of Clark and Randolph) and pull any probate file and see the will, the inventory, any court orders that were entered with respect to the administration of the estate. The public nature of probate is exemplified in the Anna Nicole Smith case. Anyone can go online and download the will of Anna Nicole Smith as well as many other celebrities. Trusts on the other hand are administered privately. Another reason why people want to avoid probate is the cost. In order to administer a will, a lawyer has to be hired to file something called Petition for Letters of Administration. A court date has to bet set and on that court date the will is admitted to probate and the court is satisfied as to who the decedent's heirs are. The heirs have to be notified, notice has to be published in the paper as required by statute. It is the opportunity for any disgruntled heir, any creditor to file a claim against the estate.

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There is an opportunity for people to avoid probate with something called a small estates affidavit. A small estates affidavit enables people to avoid probate provided that the size of the estate is under $100,000. However, the $100,000 applies in the aggregate. That is, if there were three assets and each of them were worth $40,000 you could not use a small estates affidavit even though each is under $100,000. You have to add up all three of them which totals $120,000.00. Since $120,000.00 is more than $100,000.00, you cannot use the small estate affidavit. You have to open up a full probate estate. The living trust properly implemented avoids probate. Why does it avoid probate? Literally it avoids probate because the owner doesn't die. You can die, but if you have your assets in an entity called a living trust then upon your death somebody you've named to take over called a successor trustee administers the trust according to your instructions. Joint tenancy with right of survivorship also avoids probate. But unlike joint tenancy a living trust allows you to keep control over your assets. If you put your assets in joint tenancy with your children and one of your children goes through a bankruptcy or divorce, your assets are vulnerable to the decisions of a judge or bankruptcy trustee. You are the sole beneficiary and trustee of your trust. There is no risk that your children's creditor difficulties could impact the security and safety of your assets.

Call 847-674-0200 for a free consultation An additional benefit of living trusts is that it avoids guardianship. If you lose decisional capacity, that is to say you become incapacitated at some time during your life, then in order for your loved ones to apply that property for your care, they have to go to court. This is sometimes called a "living probate." And unlike a death probate a guardianship can go on for many, many years. Every six months the appointed guardian has to account to the court. Careful records must be kept. A lawyer is also involved in presenting this account into a court.
Often times the court will not appoint your wife or your child. The court will appoint a bank to take care of the guardian's estate.

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