The process of probate comes into play if you pass away in possession of personally held assets. Most people will use a will to direct the transfer of these assets. If you go this route, the will must be admitted to probate.
During the probate process the court will determine the validity of the last will and supervise the administration of the estate.
Probate Expenses
There are some considerable expenses that can pile up during the probate process. The court will require a filing fee, and the executor or personal representative will be entitled to payment.
A probate lawyer is typically going to be retained by the executor, so there will be legal fees. Final taxes and other accounting matters enter the picture, so an accountant is often necessary.
Property is prepared for distribution to the heirs to the estate during probate. This can involve appraisals and liquidation. Appraisers and liquidation companies are going to charge for their services.
There is no universal sum or percentage that you can use to answer the question of cost. The exact cost of probate is going to vary on a case-by-case basis. The more complicated the case, the more expensive it is going to be.
Avoiding Probate
It is possible to avoid probate and the costs that go along with it. There are various different ways to arrange for the transfer of assets to your heirs outside of probate. The ideal course of action will depend on the circumstances.
One very popular choice for people who are interested in avoiding probate is the revocable living trust.
People are often reluctant to think about trusts because they don’t want to lose control of the assets while they are living. With a revocable living trust, you do maintain incidents of ownership throughout your life. Because the trust is revocable, you could actually revoke or rescind the trust if you choose to do so.
When you create the trust you express your wishes in the trust agreement. You also choose a trustee to administer the trust after your passing along with a beneficiary or beneficiaries.
After you die, the trustee distributes monetary assets to the beneficiaries in accordance with your wishes as stated in the trust agreement. The probate process is not a factor. These distributions are made outside of probate.
A Matter of Value
Many individuals assume that trusts are costly to create. Because of this assumption they decide that they will simply use a last will.
Value is a factor when you are making these types of decisions. There are legal expenses involved when you create a revocable living trust, but there are probate costs looming if you don’t use a trust.
When you consider all of the factors, you may find that the trust provides better overall value.
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