Families should avoid probate at all costs. When a will isn’t made, families will have to endure lengthy court proceedings and undue expenses. If a will was present, these expenses could be avoided, and there will be less of an internal family struggle where families often argue over assets.
The Process of Probate
The majority of probate cases do not consist of contesting parties or conflicts. Clerical in nature, the ideal probate case will go smoothly and won’t require:
- Court proceedings
- Legal research
This is the ideal case. If probate is contested, immense research and time will need to go into the probate process, causing it to be more lengthy and costly. Depending on the state, probate may be handled completely by mail, but in other states, an attorney will need to make routine court appearances to finalize all of the fine details.
So, where does probate become costly?
While sounding simple in nature, probate will normally take up to 5 – 15% of the estate’s value. Larger estates will obviously suffer greater losses as a result.
Understanding Probate Fees
Probate is costly because of all the fees. You’ll be paying fees to the:
- Executor: Most executors will waive a fee if they inherit some of the property, but this isn’t always the case. In New Jersey, an executor is entitled to 6% of the income from the estate plus 5% of the estate’s gross value.
- Attorney: The fees attorney’s charge for probate depend on the complexity of the case. Normally, attorney fees amount to 5% of the estate’s gross value or more. In some states, probate fees are determined by the court.
Executors or administrators of an estate will often waive their fee, but this isn’t a requirement. In total, an estate with a $100,000 value will cost at least $5,000 in legal fees and $5,000 – $11,000 in executor fees. The family will be left with $84,000 – $95,000 on average.
Larger estate will have to pay federal taxes as well, but 99% of estates will not have to pay federal taxes. In the State of New Jersey, estate taxes are very high, and will take a large portion of an estate.
Probate is an extremely costly procedure that can leave families torn apart, and will leave less money in an estate. A reduction of up to 16% of an estate can be expected in a normal probate case, but this figure will vary – especially if probate is contested.
Wills allow families to avoid costly probate. The average cost of a will can vary. Lawyers normally charge $150 to $1,500 depending on the complexity of a will, but many people choose to make a will on their own for much cheaper. The problem with the do-it-yourself route is that the will is not overlooked by a legal professional and may have vital errors that void the will.
Leaving an estate to family without having a will in place will require a costly probate process that dwindles down the value of the estate.
The Micklin Law Group, LLC is a New Jersey law firm specializing in family law and estates. Attorney Brad Micklin was recently named to The National Advocates list of Top 100 attorneys from each state. To set up a consultation, call 973-562-0100.