Looking to avoid the cost and time of probate? There are various ways to plan your estate in a way that can avoid the probate process. However, whether probate avoidance is necessary depends on many factors, such as: how much does probate cost? Whether probate is good or bad is highly subjective. In order to determine the benefit of probate avoidance, you should first understand exactly what is involved in the probate process and then compare that with your needs based on your unique financial status and family situation.
What fees and expenses can expect in probate?
It is not always true that avoiding probate avoids the need to pay legal fees. Probate avoidance through living wills or jointly-owned assets will still create tax consequences that must be dealt with and usually require the services of an estate planning attorney. Although that method is not technically considered part of the probate process, it is still a part of estate administration, for which an attorney must be compensated.
Estate planning law firms charge different fees for probate and estate planning services. Some attorneys charge a flat rate, while others bill on an hourly basis, with minimum charges for certain things. Regardless of the method, the fees charged must be fair and reasonable, and must be approved by the Department of Revenue. In addition to attorney’s fees, there are other fees you can expect to pay as a part of the probate process. Some of these include:
- Court Fees
- Personal Representative Fees
- Accounting Fees
- Appraisal and/or Business Valuation Fees
The amount of court fees and personal representative fees are set by the laws of each state. There may also be some miscellaneous fees depending on the nature of the particular estate, including the cost of postage for mailing notices to the Personal Representative and beneficiaries and mailing documents to the court and taxing authorities; the cost of insuring and storing personal property; shipping personal property; and the cost of moving personal property.
The cost depends on the complexity of the estate.
Probate is not an inherently expensive process. This is especially true, when the value of your estate is small and the nature of your assets is not too complex. However, sometimes family dynamics can make the probate process more expensive. For example, when there are disputes over property, legal proceedings may be required to resolve those disagreements. Unfortunately, people often create legal issues for themselves, which require hiring attorneys, which in turn, increases the costs.
On the other hand, when there are no unnecessary complications, and a comprehensive and properly drafted estate plan exists, there is really no need to fear probate. In fact, probate may be more beneficial for some, as the probate court supervises the process to make sure that everything takes place as it should.
Once all of the likely fees and expenses are added up, probate may cost anywhere from 3%-8% of your assets. This does not include estate and income taxes, which may need to be paid during the course of probate administration. Essentially, there are advantages and disadvantages to the probate process. The most important step you can take is to discuss with an estate planning attorney how various methods of estate planning will work for you.
If you have questions regarding probate of an estate, or any other estate planning needs, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.