When it comes to estate planning, most people have heard that it is important to include probate avoidance strategies in an estate plan; however, they often are unsure exactly why it is so important to avoid probate when possible. Not surprisingly, without a clear explanation for the need to avoid probate, many people end up with estate plans that will require the estate to spend a good deal of time in probate. The time it takes even a relatively simple estate to go through the probate process is actually one of two primary reasons why avoiding probate should be a priority in your estate plan. The other reasons is the cost of probating an estate. Exactly how much does probate cost? The unique nature of probate makes it virtually impossible to provide an “average” cost; however, taking a look at the factors that commonly determine the cost of probate may be helpful as will a better understanding of the probate process itself.
Probate is the legal process typically required following a death. The ultimate goal of probate is to provide for the legal transfer of estate assets to the intended beneficiaries or heirs of the estate. Before that can occur, estate assets must be identified, located, and valued. In addition, all creditors of the estate must be notified and provided with an opportunity to file a claim against the estate. Finally, a personal taxes owed by the decedent as well as all estate taxes due from the estate must be paid before assets can be released.
The size of an estate will usually have a direct impact on the time and expense needed to probate the estate; however, not all assets are required to go through probate. For this reason, the aggregate size of an estate alone may not be indicative of the time and expense required to probate the estate. What matters is the size and complexity of the probate assets. Some common expenses incurred during the probate of an estate include:
- ·Executor/Personal Representative fees
- ·Legal fees
- ·Appraiser fees
- ·Accountant fees
- ·Real estate commissions and fees
- ·Costs involved in selling assets, particularly real estate
- ·Costs involve in maintaining assets for the duration of the process
The longer the probate process takes, the higher many of these expenses will be. In addition, the sheer number of probate assets can increase the costs involved in probating the estate. For example, if the estate includes multiple real property assets, each one must be appraised and maintained for the duration of the process. These costs and expenses can add up fairly quickly, ultimately draining the estate of its overall value.
The god news is that by focusing on probate avoidance strategies in your estate plan you should be able to dramatically decrease the costs associated with the probate of your estate, thereby leaving more behind for your family and loved ones as you undoubtedly intended. If you have additional questions or concerns about probate avoidance, or estate planning in general, contact the experienced New York estate planning attorneys at The Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.
Latest posts by Saul Kobrick (see all)
- 529 Plans: Planning for Education with a Tax and Asset Protection Bonus - September 10, 2019
- The Importance of Communicating Your Plans - September 5, 2019
- Planning for the Unexpected - September 3, 2019