A benefit of a properly drafted living trust is that your estate can avoid the probate process. Whether avoiding probate is good or bad is highly subjective. In order to determine the benefit of probate avoidance, you must first understand exactly what the probate process involves and then compare that with your specific needs based on your financial and family situation.
What are the fees and expenses that can be expected?
Contrary to what you may have heard, avoiding probate does not avoid the need to pay legal fees. That is because probate avoidance through living wills or jointly-owned assets still creates tax issues that must be addressed and usually require the services of an attorney. Although that method is not technically considered part of the probate process, it is still an estate administration process for which an attorney will be compensated.
Fees for these probate and estate planning services differ from one law firm to the next. Some attorneys charge a flat fee, while others bill on an hourly basis with certain minimum charges. Regardless of the method, the fees must be fair and reasonable.
In addition to attorney’s fees, following are other fees you can expect to pay during the probate process:
- Court Filing Fees
- Newspaper Publication Fees
- Personal Representative Fees
- Accounting Fees
- Appraisal and/or Business Valuation Fees
Court fees and personal representative fees are set by state law. There are also other miscellaneous fees that may be incurred depending on the nature of the estate. These can include the cost of postage to mail notices to the Personal Representative and beneficiaries and to mail documents to the court and taxing authorities, the cost of insuring and storing personal property, shipping personal property and the cost of moving personal property.
The cost depends on the circumstances of each estate.
Probate is not an inherently expensive process, especially if the value of your estate is relatively small and the nature of your assets is not too complex. Some family dynamics can make the probate process more expensive, due to disputes over property, for example. In those unfortunate situations, people often create legal issues and hire attorneys, thereby increasing the costs.
Assuming a harmonious family and a comprehensive and properly drafted estate plan, there is no need to fear probate. In fact, probate may even be a beneficial process in that the probate court supervises the process to make sure that everything happens the way it should.
Essentially, there are pros and cons to the probate process as well as probate avoidance. The most important thing is that you discuss how each method will work with your circumstances with an Arkansas estate planning attorney.