When Buying a House Becomes an Estate Planning Horror Story: One Family’s Fight
An old proverb goes: “for the want of a nail, the shoe was lost; for want of the shoe, the horse was lost; for want of a horse, the rider was lost; for want of the rider, the battle was lost; for want of the battle, the kingdom was lost; and all for the want of a nail.”
Smartly constructed estate plans can reduce the stress and hassle involved in transferring assets to charities and beneficiaries while minimizing red tape, tax issues and the likelihood that so-called “creditors and predators” will sap your estate and create havoc for your loved ones.
Unfortunately, even a simple, seemingly trivial mistake can turn an otherwise careful transfer of an asset (like a house) into a horror story – and you may not even realize you’ve made a mistake until it’s too late.
One Arkansas family currently faces big consequences because of just such a mistake. Before he passed away, a man bought a house in California. His intention was to leave the house to his daughter – a laudable goal.
But although he had been very careful to put all his assets in his joint living trust with his wife, he left this asset out and died as an Arkansas resident holding title to the California house.
Now the family faces a major estate legal headache. Everything they have is in the trust. The only way for the daughter to receive the house her father bought is to go through probate in California. To make matters worse, the California probate process will cost over $11,000. This fee is set by California statute, and it’s actually illegal for an attorney to charge less.
It took an entire year to resolve this situation, a disaster that could have been easily avoided if dad had taken title in the name of their living trust when he bought the house. In other words, one simple oversight created months of stress and significant additional expense.
An Arkansas living trust is a legal entity created to benefit one or more people, known as the “beneficiaries.” Designated individuals known as “trustees” manage the assets in the trust. Living trusts offer a popular way to avoid the probate process and streamline the passing of assets to family members. The creators of the trust can act as trustees while they are alive and name their spouses, children, or other individuals as beneficiaries to receive the remaining assets in the trust when they die.
Our experienced Arkansas living trust attorneys can help you and your family plan for the future and avoid simple but costly mistakes. Please call us for a free consultation at 800.827.7784.