“My grandfather left my 4 siblings and myself 5 parcels of land in California. To pay their legal fees, the estate lawyer sold one of the properties. They told the realtor to sell it for $65,000 which is the amount they were owed.”
“They selected the parcel which was disconnected from the other 4 which probably seemed like a good idea to them. Unfortunately, they sold the only parcel which was possible to subdivide. Subdivided into 3, that parcel was worth about $330,000. The realtor sold the whole thing for $110,000 which was better than $65,000 but much less than the $ 330,000 that the parcel was actually worth.”
“So we lost about $220,000 in probate there, not to mention the $65,000 in legal fees.”
This is a story shared by one of our living trust clients. Many people choose to set up a living trust because they have experienced firsthand the devastating probate cost and other headaches that come with it.
How Much Your Family May Have to Pay in Probate Cost
Unfortunately, not everyone realizes how much the probate costs can be. In the example of our client here, legal fees alone cost $65,000. This money could have gone to a family member, helping them with their mortgage, college education, or start up a business. This, instead, went to the lawyers who handled the probate process.
Another drawback of the probate process is that the family has no control over the assets during this time. This means they could do nothing but watch the parcel of land being sold for a third of its actual price. Generally, the probate process could take anywhere from six months to two years, or even longer in many cases. The value of different assets, such as real estate or stocks, can fluctuate significantly during such time periods. Without proper management, the family can lose much more than the legal fees.
Probate and probate cost often apply when a person passes away without any instruction regarding their estate. Even with a will, the estate still needs to go through the probate process. It can drag on much longer in case the will is contested.
Probate cost is one of the reasons why living trust needs to be a priority for many. With a living trust, there is no probate required. You can decide how your estate can be used or transferred to your family members or heirs. Instead of losing tens of thousands of dollars to probate cost, they can receive the full amount that you intended. Instead of waiting months or years to gain access and control of the assets, they can take over and manage the assets when it’s time.
To learn how you can set up a living trust and ensure your family’s future, contact a living trust expert today at Heritage Living Trust.
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