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The Probate Nightmare Can Be Avoided With Some Pre-Planning
Dated: December 3 2020
Avoiding Probate In The Sale Of A Home
If you are a “baby boomer” (born between the the mid-1940’s and approximately 1964) there is a real good chance that you will inherit real estate sometime in the not too distant future. And, like it or not, you very well could be leaving real estate to your own heirs in the decades to come. Boomers are expected to inherit $136 trillion over the next four decades with an average inheritance totaling $177,000. In many cases, that inheritance will involve the transfer of real estate. It is a widely held belief that as long as the deceased had a will, no probate will be required. That, at least in the state of Arizona, is simply not true. Here are some facts that may interest you:
- Real estate assets in excess of $100,000 must be probated even if a will identifies a beneficiar
- If a married couple holds title as community property with right of survivorship the real property will transfer to the surviving spouse with no probate
- The cost of probate can range from approximately $750 for a simple, informal process to many thousands of dollars for a contested or more complicated probate.
- Real estate that is held in a trust rarely requires probate
- Only 5% of Americans have set up a trust for the easy transfer of assets.
- Here’s an example of the difference between a will and a trust in the transfer of property:
A 78 year old gentleman needed to sell a home belonging to his widowed mother who passed away. The home and other assets were held in a trust that his parents had set up 17 years prior, with the 78 year old son named as successor trustee. The son was automatically granted the right to distribute and dispose of assets per the wishes of his mother. In order to get the home sold, he simply needed to show the certificate of trust along with the death certificate. Once those documents were provided, he was able to sign as the seller of the property with no hiccups.
A 66 year old woman was named as executrix of her mothers will and believed that to be sufficient in order to honor her mothers wishes in the distribution and disposing of assets. What she didn’t realize is that real property worth more than $100,000, not held in a trust, must be probated by the state of Arizona. This was a lengthy, difficult, and costly process which involved court over-sight and approval of the sale, paying for an appraisal prior to listing the property, and going through the very stressful bidding process which could up-end a contract for sale. She had to hire an attorney, deal with mounds of paperwork, attend court hearings, and follow the instructions of a judge rather than being focused on fulfilling moms last wishes.
Both of these individuals were clients of The Sharyn Younger Team. They were provided concierge services to assist with estate sales, moving services, clean out, repairs, and referrals to financial advisors and other professionals to assist with decision making. They were treated by this team with compassion and expertise in probate and trust home sales.
Many people believe the myth that trusts are only for the extremely wealthy, and that it costs a tremendous amount of money to have an attorney draw up a trust. There are many options for becoming knowledgable about, and creating a trust, from para-legal type professionals to attorneys who specialize in estate law. What you require and what you pay will be, in large part, determined by the complexity of your situation. It’s not atypical to spend $2500 on your average trust. Quite a sound investment if you can save the time and money it takes to get through probate.
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