How Do I Get a Trust for my Parents?
It is wonderful that you want your parents to have a trust. A trust is one of the best ways a parent can ensure that their spouse, children and loved ones are cared for after their death. As a well-intentioned child, it may be difficult for you to hear that ultimately, only your parents can implement a trust for themselves. If your parents are resistant to implementing a trust for themselves, you may want to have a conversation with them to show them all the ways a trust is beneficial to them and their loved ones. Usually, when they learn the ways that a trust will save their family time, money, and stress after they die, they will agree that a trust is a good idea.
How a Trust Saves Money
In basic terms, a trust is a probate avoidance strategy. Probate is the process by which the courts decide how a person’s assets will be distributed following their death. If the deceased person had no trust in place and at least $150,000 in assets their estate will be subject to probate. It is common for a person to underestimate the value of their estate. Your estate is comprised of real estate, checking, saving, stocks, bonds, retirement accounts, life insurance policies, vehicles, jewelry, coin collections, and so much more. These things add up quickly, and for most homeowners in California, your home alone guarantees that you have hit that $150,000 threshold.
So why do we want to avoid probate? Probate is expensive. Typical probate fees for a $250,000 estate are $17,500. For a $500,000 estate, the fees jump to $27,500. At $1,000,000 you can expect probate fees of $47,500. The cost of implementing an estate plan is minimal when compared to probate fees. Ask your parents: do you really want the government to take that much of your hard-earned money and give it to non-family members when you die?
How a Trust Saves Time
As if the whopping price tag isn’t a big enough reason to avoid probate, discussing all the ways a trust can save their family time is helpful. For those without legal expertise in Estate Planning, Trust, and Probate Law, the probate process is confusing, stressful, and complicated. Probate requires court appearances, complicated legal documentation, and consultation from experts. Dying without an estate plan in place is like asking your children to spend several years taking time off of work and away from their own lives to attend legal proceedings and fill out piles of paperwork. Is this really the way you want your loved ones to remember you?
How a Trust Prevents Stress and Brings Peace of Mind
When people are grieving, they may not act like you would expect. Families are more likely to argue, disagree, or fight after the loss of a loved one because arranging a funeral and distributing assets is a stressful situation. Putting a trust in place makes sure that your voice is heard. You get to decide where your money goes. You get to decide who is in charge. You get to decide who gets your jewelry, your china, your family heirlooms, your coveted family treasures. This leaves less room for your family to fight over who gets great grandma’s wedding ring, or your father’s civil war collection. Nobody wants to leave a mess for their family when they die. When I asked my parents to get a trust, I said “I don’t care what you do with your stuff. I just want you put a trust in place so I don’t have to argue with my siblings over what to do with it.” Chances are, your parents know someone who has gone through this process. Ask them if they want the same thing for their children.
They Still Won’t Get a Trust…What Gives?
If your parents have heard and understand the three points above, but are still not convinced they need an estate plan in place, there are usually some underlying fears. Let’s rattle through those really quickly.
- They think it will be expensive: Maybe finances are tight, their income is fixed, or it sounds more fun to take a cruise to the Caribbean for their 40th anniversary than pay for a trust. These are all totally valid concerns. Consider offering to cover a portion of the trust, since ultimately, you’ll be the one saving money when they implement it. Ask your siblings if they can pitch in. Also, set a good example. Get your own estate plan in place. Give them a firsthand experience of how great you feel now that you have one in place. Tell them the easy sleep at night and peace of mind were worth every penny.
- They don’t think they own “that much”: If your parents own a home in California, and especially in the Bay Area (think San Francisco, Oakland, Hayward, San Leandro, Hercules, Danville, Brentwood, Martinez, Discovery Bay, Antioch, Concord, Oakley…) it is pretty much guaranteed that their assets are greater than $150,000. Consider asking them to make a list of their assets to see what they really own. You can use this form to get a clear picture of their assets. Even if they don’t own a large estate, there are plenty of other reasons to implement an estate plan. Tell them to consider Durable Powers of Attorney, a Will, and Advanced Health Care Directive, for example.
- We aren’t that old, we’ve got a long way to go: Life is fragile and unpredictable, and your age and health are not the only things that determine when you will die. People die unexpectedly all the time. There is never a good time for an unexpected death, and it only makes handling these situations harder for the folks they left behind. Making these decisions is easier when your spouse is by your side. Waiting until you are in a health crisis or until one spouse has died only makes this process harder. When it comes to matters of estate planning, prepared is the best bet. Although my job is to make the implementation of a trust as easy as possible, I can’t shortcut the process. I have to make sure my clients understand every aspect of their estate planning options so they can make an educated decision. Remember the first time you bought a house and had to trudge that huge mountain of paperwork? For some seniors, speaking with an attorney about trusts can feel similarly overwhelming. Remember that as we get older, our cognitive abilities slow down and can impair our ability to understand complicated matters. I have noticed that the younger my clients are, the easier it is for them to navigate the estate planning process.
- Just let me finish X and then we can talk about this: Maybe your parents have a big milestone they’re looking forward to – the marriage of a child, birth of a grandchild, a special birthday, anniversary or holiday, retirement, etc. – and thinking about their own death when they have so much to look forward seems a little grim. At the risk of sounding scary and cliché, as people age, they are more likely to die immediately after reaching that big milestone they’ve been hanging onto, no matter what it is. We have had several clients call us in January to say mom or dad passed right after Christmas or New Years, or within a few weeks or months of their spouse dying. There is no definitive study showing why this is true, we just know that it is. Get this estate planning out of the way now, so you can more fully enjoy those special moments you’re looking forward to.
- Meeting with an attorney sounds scary: Most people who come into our office for estate planning have never met with an attorney. They’re probably envisioning scary, slimy billboard and bus stop ad lawyers when they think of an attorney. (Side note: we’ve never advertised in any of those spaces, and don’t have anything against folks who choose that advertising outlet…it’s just not our style.) They probably think you only go to a lawyer when you’re in trouble. None of these misconceptions are true when it comes to Estate Planning, Trust, and Probate Law. Most of our clients have never met with an attorney. They don’t have a personal lawyer saved in their phone contacts. They aren’t in any pressing legal trouble. Our office caters to these situations. We are here to help you avoid legal troubles for your loved ones.
- Your parents are superstitious (if I think about it, I’m going to die!): I hate to break it to you, but death happens to everyone, whether they think about it or not. Delaying your estate planning does not delay your death. Maybe ask them if they think the probate process would exist if this superstition was true?
After this article, you should feel equipped to ask your parents to get a trust. I’ll leave you with a few final thoughts that I have often heard from clients who waited to implement their estate plan: “I always thought I’d be here with my spouse to do this” and “If my parents knew how awful this would be, I know they would have done a trust.” Give yourself and your family the gift of preparation by meeting with an attorney to create your estate plan. In that case, you’d be quoted saying things like “I sleep better at night knowing that my family will be taken care of once I die” or “I’m so thankful my parents did this.” Matthew Hart is a California Licensed Attorney who is an Estate Planning, Trust & Probate Law Specialist certified by the State Bar of California. His office is in Antioch and he can be reached at 925-754-2000 or www.MatthewHartLaw.com.
