Ideally, your estate plan should consist of a comprehensive set of strategies, plans, and tools that accomplish a number of goals related to protecting you, your loved ones, and your assets. One common estate planning goal is probate avoidance. While you may be aware that avoiding probate is desirable by many, you may not know exactly why.
Probate avoidance strategies are frequently included in a comprehensive estate plan for two important and inter-related reasons. The first is the time involved. The second is the cost. The cost of probate can often outweigh the cost of creating an estate plan that does not involve probate. In fact, a good estate plan can significantly shorten or avoid the probate process altogether.
How Probate Works
When you die, you will leave behind an estate. It will consist of all your owned assets and/or those in which you have an ownership interest. Probate is the legal process whereby those assets are identified, valued, and eventually transferred to the intended beneficiaries or legal heirs of the estate. As a general rule, the more numerous and/or valuable the probate assets are, the longer and more expensive the probate process can be. On that note, you might be asking yourself, why does the cost of probate seem so high?
The Cost of Probate
Although every estate is unique, some common costs associated with the probate of an estate include:
Filing fees and other court costs –
Just like any other court action, there are filing fees and other direct court costs related to probating an estate. Depending on the type of probate, the filing fee can be a few hundred dollars.
Executor fees –
The Executor of your estate has to devote time to his/her duties and responsibilities. They are, therefore, entitled to be compensated for that time.
Attorney fees –
In rare cases, an estate is so small that an alternative to formal probate can be used. For almost all other estates, your Executor or Administrator will need to seek legal assistance. An experienced Texas estate planning attorney can provide that assistance. They will do so by guiding your Executor or Administrator throughout the probate process. Thus, the attorney, like the Executor or Administrator, will be compensated for his/her services.
Appraisal fees –
Typically, the Executor or Administrator of an estate must submit an inventory listing all estate assets and the corresponding “date of death” (DoD) values. Those values often requires the assistance of a certified appraiser for real property. You might also need a professional appraiser who specializes in determining DoD values for other estate assets, such as jewelry and coin collections.
Real estate fees –
There will be additional fees and costs if your estate includes real property that needs to be sold. That includes commission fees for the real estate agent, inspector fees, and closing costs.
Maintenance & upkeep –
All assets must be secured and protected by your Executor for the duration of the probate process. Maintenance and upkeep expenses will likely come along with that, such as Insurance Premiums and Storage Fees.
You can see how the costs associated with probate can add up quickly. Your estate will be billed for those costs. Meaning, there will be a diminished estate to pass on to your loved ones.
If you have additional questions or concerns about avoiding or minimizing the cost of probate, or about your Texas estate plan in general, contact the experienced Texas estate planning attorneys at The Mendel Law Firm, L.P. by calling 281-759-3213 to schedule your appointment today.