An attorney in Los Angeles was referred a new client - the estate of a doctor who died very unexpectedly. Before he died, the doctor had a very sophisticated law firm prepare his estate plan - his revocable trust was 64 pages long!
And, yet, the law firm forgot to think of one of the most obvious things: transferring his medical practice into the trust. The doctor had actually planned and paid for a living trust so that his estate would avoid probate. But because this significant asset - his medical practice - was omitted from the trust, probate had to be filed anyway just for the medical practice.
(In California, there is a streamlined procedure you can use to posthumously transfer assets into a trust - if those assets are at least listed in the trust document as being included in the trust even if they haven't been formally transferred. But the lawyers at the sophisticated law firm hadn't even listed the medical practice as an asset of the trust!)
When doctors who are sole practitioners die, their practices decline in value very quickly. So the attorney had to go to court twice: first to get authority from the probate court on a rush basis in order to sell the practice while it still had value, then to transfer the sale proceeds and other assets of the practice into the trust.
The long and the short of this is that it will be at iexplorer crack six months until the assets of the medical practice go through the probate process and the attorney can get the assets to where they need to go - to support the doctor's widow and children.
The widow has had to make numerous trips to her attorney's office, the estate has incurred substantial court costs, and at the end of the probate, there will be a five-figure statutory legal fee. Had the medical practice been transferred into the trust, the widow would have had access to the assets within a few days of her husband's sudden death.
Perhaps the doctor was thinking of incorporating his practice, which would have made transferring it to the trust easier, or perhaps the lawyers who prepared his estate plan didn't know how to transfer a medical practice into a trust. Whatever the reason, failing to take this particular paperwork step has and will cost the estate time, money, and aggravation.
How does this unfortunate incident relate to your own estate planning situation?
If you don't yet have a revocable trust, you'll want to set up a trust as soon as possible and make sure you transfer ALL your assets into the trust.
If you do already have a revocable trust, make sure ALL your assets have been transferred to it. Especially if you've recently acquired new assets, check that these new assets are included in the trust. This includes your small business or practice, stamp collection, works of art, classic cars, everything!