Economics

The Perils of Probate

Published

9 years ago

February 22, 2016

By Tanya Dennis

Money matters. Home, possessions, bank savings and investments dictate the quality of life, and many people live with an intent to leave a legacy to loved ones.

Unfortunately, poor planning can decimate an estate. Some individuals leave a will, believing that their children or spouse will be taken care of.

Instead, children or the spouse face many months or years in probate court, watching estate assets dwindle away to pay attorney fees and court appointed examiners.

Too many families walk away with nothing after going through probate.

The reason may be poor planning. Another reason is that for decades, if not centuries, lawmakers in California have favored court and banking interests.

A will is not sufficient.

To avoid poor planning the next step after a will is to execute a revocable living trust. A will without a trust attached will be “probated” by the state to assure that the will is legal.

This leads to thousands of dollars in probate cost. For example, the average cost of probating a will for a $500,000 estate is approximately $23,000 in attorney and court fees, money that should go to the trustee’s beneficiaries.

The beauty of a revocable living trust is its flexibility and the protection it provides to the person who is the trustee of the trust and the person’s beneficiaries.

When a revocable living trust is executed, all transference of wealth to the trust occurs to the person now designated as the trustee. Although assets have been relinquished to the trust, the trustee as beneficial owner can sell, manage or give away assets and have the option at any point to change terms of the trust, change beneficiaries or even revoke the trust.

Once the trustee die, the revocable living trust becomes irrevocable, meaning what has been written is now etched in stone and cannot be changed.

Unfortunately, having a will and revocable living trust does not protect the trustee’s estate one hundred percent from probate court. Heirs will lose protection from probate court if the will or trust is contested, meaning that a family member fails to honor the wishes of the deceased and challenges the validity of the will or trust.

The majority of the time the will and trust are upheld in court, but meanwhile thousands of dollars or more are lost to the court. To avoid this from happening, it is imperative that family members sit down together and final wishes clarified.

This is the time to settle any dispute.

It is also helpful that family members have a copy of the will and trust, so that each item in the will and trust is discussed.

To discourage family members determined to contest the trust, insert a clause that anyone contesting the will and trust will receive one dollar for their efforts and lose any other benefits previously written in the will and trust.

An ounce of prevention can head off problems. When executing a will and revocable living trust, it is imperative that wishes of the deceased are honored and loved ones effectively avoid probate court.

A will and revocable living trust protects loved ones when they are most vulnerable.

Next week: Probate Court Drains Assets

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Oakland Post: Week of October 30 – November 5, 2024

The printed Weekly Edition of the Oakland Post: Week of October 30 – November 5, 2024

Published

1 day ago

November 1, 2024

Oakland Post

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Business

Special Interview: Rep. Barbara Lee Discusses Kamala Harris’ Plan for Black Men

On Oct. 16, California Black Media (CBM) spoke with Harris-Walz campaign surrogate, Congresswoman Barbara Lee (D-CA-12), who shared more insights on Harris’ agenda and the importance of securing the Black Male vote. “She has said very clearly that she wants to earn the vote of everyone. And that means earning the vote of Black men,” said Lee of Harris. “She understands the systemic and historic challenges that Black men have. You haven’ t heard of a presidential candidate coming up with a concrete actual plan and policy agenda.” The agenda includes five focus areas based on insights she gleaned from hosting discussions with Black men during her Economic Opportunity Tour.

Published

5 days ago

October 28, 2024

Oakland Post

(File Photo) U.S. Congresswoman Barbara Lee (D-13-Oakland) chides Justices on the Supreme Court of the United States for voting to strike down Affirmative Action. She is shown here speaking in front of the California Reparations Task Force in Oakland on May 6, 2023. CBM photo by Antonio Ray Harvey. By Edward Henderson, California Black Media

By Edward Henderson, California Black Media

Last week, the Kamala Harris campaign released its Opportunity Agenda for Black Men.

“She has said very clearly that she wants to earn the vote of everyone. And that means earning the vote of Black men,” said Lee of Harris. “She understands the systemic and historic challenges that Black men have. You haven’ t heard of a presidential candidate coming up with a concrete actual plan and policy agenda.”

The agenda includes five focus areas based on insights she gleaned from hosting discussions with Black men during her Economic Opportunity Tour:

Provide 1 million loans that are fully forgivable to Black entrepreneurs and others disadvantaged groups to start businesses.
Champion education, training, and mentorship programs that help Black men get good-paying jobs in high-demand industries It will also develop more accessible pathways for Black men to become teachers.
Support a regulatory framework for cryptocurrency and other digital assets so Black men who invest in and own these assets are protected.
Launch a National Health Equity Initiative focused on Black men that addresses sickle cell disease, diabetes, mental health, prostate cancer, and other health challenges that disproportionately impact them.
Legalize recreational marijuana and creating opportunities for Black Americans to succeed in this new industry.

“[Vice President Harris] knows that Black men have long felt that too often their voice in our political process has gone unheard and that there is so much untapped ambition and leadership within the Black male community,” the language in the agenda states. “Black men and boys deserve a president who will provide the opportunity to unleash this talent and potential by removing historic barriers to wealth creation, education, employment, earnings, health, and improving the criminal justice system.”

Diving into Harris’ agenda, Lee says, reminded her of her own record of supporting Black men over the years as an elected official. In the 90’s, she established the first California Commission on African American Males through which she pressured the state to address urgent economic, health and social challenges specific to Black men.

“No group of people are a monolithic group of people,” said Lee She’ s not taking any vote for granted. I’ve known her over three decades and I believe she is being herself. She’ s authentic,” Lee added.

Each of the 5 key points addressed in the Harris Campaign’s agenda, Lee says, has additional clauses that can potentially help Black men and their families thrive. This includes lowering rent; up to $25,000 in downpayment help for first time homebuyers; and cutting taxes for Black men in lower-wage jobs by increasing the Earned Income Tax Credit maximum to $1,500.

“I think the messages is one of empowerment for Black men — regardless of whether they’ re a blue-collar worker, if they’ re not working, if they’ re in business, if they’ re an entrepreneur, whatever background or whatever they’re doing or experiencing life. I think the authenticity of their experience can only be articulated through them,” said Lee.