How Much Does Probate Cost?
Oct 17, 2022
Probate will cost. A lot. When given the statistics, my clients are usually appalled that their estates going through the probate court system would cost so much. On average, the probate court system will eat up about 4-10% of an estate. Many states allow a standard 5% fee for an executor or administrator, but in many cases when more money is sought, the court will approve it. This means the standard for a $1 million estate would be $50,000, and the standard for a $5 million estate would be $500,000. This is why many attorneys and law firms will focus on doing a Last Will and Testament, which means probate for the estate, and then offer the family to handle all of it for the 5% fee. In addition to this, there are other expenses of the estate, such as accounting fees, appraisals, and so on.
Well, what about the estate beneficiaries? What do they think of these massive costs? It's unfortunate, but they often think "Five percent, but we don't have to do anything... sure, sounds about right." And they sign up with the law firm, relinquishing their assigned positions in the Will as executors, and letting the attorney run things. They are not thinking about the $50,000 or the $500,000 being given to the firm that could have been avoided using a revocable living trust. They are thinking about the $950,000 or $4,500,000 they'll be getting in about a year when the whole thing is done and over with.
Most of my clients come to me initially because they have had a bad experience with probate, either as an executor or a beneficiary. They had seen firsthand how horrible and expensive things can get, and they want to make absolutely sure that their loved ones don't have to go through this same process. By planning ahead using a revocable living trust, and then funding it properly, everything, or nearly everything, can avoid the probate court process so the bulk of wealth can go to the beneficiaries in a much shorter period of time... and not to the probate attorneys.
For more information on avoiding the high costs of probate when planning your estate, check out the book Estate Planning Basics: A Simple Plain English Guide to Estate Planning Concepts by clicking here https://www.amazon.com/dp/B098XY2HN3.
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