Death is bad enough, but not planning for it can make it worse for those you leave behind. The money in real estate you’ve left your loved ones can be lost in legal and procedural fees. Even worse, your family can break and split, as they struggle to figure out who gets what.
But it doesn’t have to be this way, according to Keith Moten, an award-winning estate-planning attorney. I sat with him in his office in downtown LA to discuss the topic.
The worst thing you can do, he says, is nothing. Upon your death, your property will go to probate. Simply put, “Probate is the point where the court steps in—in your absence—to transfer your property to your heirs,” Moten says. But with no written will, this process can be time-consuming, expensive, and soul-crushing.
The average probate process, Moten says, can take “about a year—if no one contests it. If someone contests, you can add an additional six months to a year, or more.”
“At the very least, write a will, even if you don’t pay an attorney. If you write it in your own handwriting and you sign it, it is a valid will.” This will still lead to probate, but it can reduce the time, expense, and emotional distress that can result from doing nothing.
A better option, especially for owners of real property, is a living trust. In simple terms, a trust consists of “leaving your assets to be disposed of pursuant to a set of instructions. When and if something happens to you, people will go to that set of instructions,” Moten says.
By laying out clear instructions through a trust, you can avoid probate and the time and expense associated with it. A trust can cut time by more than half, and costs by a whole lot more. Equally important, because trusts are easier to deal with, they can reduce the chances of inheritance disputes.
But wills and trusts are only some of the tools of estate planning. Moten encourages everyone, independent of age, to explore the different estate-planning options, because when it comes to death-planning—as Moten says— “nothing is worse than doing nothing.”
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Writer: Daniel Rangel is a real estate agent. "I love doing these interviews. Aside from fun, they give me access to knowledge, which I pass down to my clients."
A big thanks to Keith Molten @ www.motenlaw.com for contributing to this article.