Living Trust: Is It Worth the Expense?

Before I talk about the topic of the day, allow me to tell you a bit about myself.  I am a duly licensed attorney and have been practicing law for approximately 6 years.  I was born and raised in the Sacramento area and began my law practice, Sutlifflaw, after 15 years as a Deputy Sheriff in Sacramento County (I somehow convinced myself that I would make more money as a practicing attorney than I would as an attorney, a topic for another day and another column).  I have always taken pride in my concern for others and I believe that attorneys, although maligned with a reputation for not telling the truth, are mostly in it for helping others.  My predecessor in this column, Betty Muegge certainly has that reputation and I hope you will find the information I impart to be as valuable as the knowledge she shared with you.

Let start today’s topic with a story.  Early in my practice I had a client come to my office who told me her husband had died without a will or a trust.  This would be my first case in court and an eye opening experience.  The first news I had for my client appeared encouraging.  Since my client and her husband were married at the time of his death, I would be filing a “Spousal Property Petition” to confirm a transfer of the community property to her.  Unfortunately, the filing fees alone were over $300.  Although I was not an expert in probate matters, it did not take long for me to complete the paperwork necessary to file the case (if I recall correctly, it took less than three hours to prepare the case for filing, including preparation of a proposed order).  The bad news for my client was that even though my time was minimal, it still cost my client approximately $600. in attorney’s fees (my rate was $200.00 per hour at that time).  This brought the total to over $900. and that is probably the simplest type of probate case!  I explained to my client that when a person dies and the estate needs to be probated, with or without a will, the fees are statutorily set.  The average cost to probate a case is typically at least $5,000.00 and can be much higher.  When we were done with the case, my client gladly paid my office the $800. I was charging at the time to complete a living trust for her so that her heirs would not have to go through what she went through with her spouse’s estate.

There are numerous other benefits to having a living trust.  The typical “Living Trust Estate Plan” includes several documents that make life easier for your loved ones upon your demise and provide you and your spouse, if you have one.  The documents usually included in the cost of a living trust are a Durable Power of Attorney for Assets, an Advanced Healthcare Directive, and a Pour-Over Will.  Additionally, most attorneys will assist you with completing the “peripheral” documents associated with completing an effective estate plan, such as the Trust Transfer Deed.  A word of caution, it is important that your intent be properly represented in your testamentary documents (you won’t be around for clarification after you die).  For that reason,  I recommend only using an attorney, preferably with probate experience, to complete your living trust.  I have seen too many living trusts that were created by non-attorneys that lacked the attention to detail, defeating the purpose of saving loved ones anxiety and money and costing the estate thousands of dollars.