Planning Probate Early and Why It’s Important
Probate is described as the legal process of verifying a last will and testament of an individual. Probate is used to distribute assets of one’s estate at the time of their death. Essentially, probate works to ensure that the last will and testament of a deceased person is carried out to its full extent – without disruption or questioning. It is vital to plan ahead of time and know the estimated costs of the probate so your loved ones aren’t responsible for it.
The Probate Process Can Take a Long Time
Estimated to take anywhere from six months to two years to complete, the probate process is a cumbersome one. The more time is taken, the more money the process costs. If a plan is not put in place before a loved one is deceased, the loved ones of the individual may be forced to probate some or all of the deceased’s assets.
The Different Costs Factored Into Probate
The reason the probate process has so many fees is due to the fact that the probate court assigns various strangers to unearth the deceased’s assets.
Personal Representative Fees
Personal Representative Fees are dictated by the state. These are fees that are deemed to exist outside of the boundaries of basic probate services.
Attorney’s Fees vary depending on how the attorney charges for their work. Some attorneys bill by the hour, some attorneys charge a flat fee while others, particularly in complicated estates charge a percentage of the value of the estate as their fee. While not all estates require an attorney, it should be noted that for the estates that do, an attorney could be a significant expense for the estate.
Accounting Fees can vary. They depend on different factors, such as assets owned. A smaller estate that owns about eighty stocks and bonds may possibly generate more accounting fees than a larger estate that could own a primary residence and a bank account. Additive fees also include estates having private investments that are difficult to calculate. Accounting fees will also include the preparation and filing of state/federal taxes if the attorney does not do so.
If you do not have a will that waives the posting of a bond before a personal representative can be appointed, your loved ones will have to pay for, as well as post a bond – the cost will be determined by the probate judge. A probate judge can require a bond despite the Last Will and Testament waiving the posting of a bond. This could be due to minor beneficiaries being involved.
Appraisal/Business Valuation Fees
These fees cover the value of a personal property, which can include antiques, artwork, cars, jewelry, and more. As well as business interest. This may be a long and difficult process. The desired outcome is to have the business be valued as low as possible during the distribution for tax purposes.
As the name suggests, miscellaneous fees include anything else not covered under the fees mentioned above. This could include postage to notary fees.
Planning Can Help Your Loved Ones
Probate costs can range anywhere from three to eight percent of your estate. A one million dollar estate may cost around $80,000 to execute. Additionally, a one hundred million dollar estate could cost around eight million dollars to execute. Planning ahead of time will ensure an easier process once you’re gone and help save on the fees that get paid to people who are not your heirs or beneficiaries.