Probate pre-payment is similar to pre-paid funeral plans and probate fees are based on the amount of work involved in managing an estate as against computation based on the value of the estate. The Queens, NY Probate Planning is paid for prior to the person’s death so the fees are no longer part of the estate. The value of the estate for inheritance tax liabilities is therefore reduced. And unlike funeral charges, probate fees cannot be deducted from the estate when they are incurred after the death.
Probate pre-payment can be taken out any time in a person’s life and fees are held by an independent trust which guarantees that the services will be provided whenever needed. The cost that entails in the preparation of a new will or reviewing of an existing one is also included in the plan.
These types of probate pre-payment plans can actually save you a great deal of money when handling the estate of a family member. For instance, from a £200,000 estate a 4% pre-payment charge of normal banks would take £8000 whilst a solicitor normal 2% charge would take out £4000. When you opt to take out a pre-payment probate plan, it means that you can protect more of the estate, paying less and at the same time keeping the fees of the inheritance tax net whilst also protecting the estate against inflation of legal costs.
Ten Estate Planning Mistakes That You Must Avoid
They have no estate plan at all. This is the worst mistake that Americans make and it is the most common mistake of all. It can also be the most expensive and lead to the worst results.
Most people postpone preparing their estate plan until they reach an age where they realize that death is not so far off. Big mistake. The reasoning may be, “I’m young, no need to worry about that now” or, “My estate isn’t big enough”, or in many cases it probably never crosses their minds. There are no guarantees in life. Every day, we read or hear stories about someone who dies young. Even if you are in the best of health, accidents happen.
What are the consequences of having no Estate Plan?
First, if you are young, and have a very small estate, you likely have children who are not yet grown. Who will care for them? Who will manage your estate and pay for your children’s education? Who will be responsible for their religious training and who will be encouraging them to go to college?
If you have no estate plan, a judge will decide all these issues. A judge will pick your children’s legal guardian (managing their inheritance), and will choose the guardian of their persons, (raising them). A judge may well select someone that doesn’t match your desires. He could even appoint a lawyer, bank or professional trustee to manage the estate. These people must be paid and they don’t come cheap. Your parents or your spouse’s parents may have a strong influence over a court. Godparents are not automatic choices. The personal guardian he appoints may not share your beliefs or religion. The whole process will be in court, will also be very expensive and could take years.
Even if you have a very small estate, this is a major reason to have some estate plan. Do not leave these decisions to others.
Secondly, if you have your own business, having an estate plan is critical. With no estate plan, you will have no say as to what becomes of your business, who gets it, and all other decisions that would have to be made when you are no longer there. Also, without a living trust, every aspect of your business, including finances will become public and available to your competitors.
Laws of Distribution in your State
Thirdly, depending on your State of residence, with no estate plan the probate judge will award your estate according to the laws of distribution in your state. Normally this is a part to your spouse and the rest to your children in equal shares. Is that your desire? Or would you rather give it all to your spouse while he or she lives? If you leave no instructions behind, you will have no say in the distribution.
- Finally, with no estate plan, you cannot avoid probate. The nightmare of probate should be avoided if at all possible. Probate is the court process for distribution of all estates except very small estates and those with Living Trusts. It is lengthy, public, expensive, and often devastating to families. For more information, review our website information. It’s really frightening.
- Joint tenancy is most frequently used to pass on the family home. If you put your home into joint tenancy with others, your home becomes vulnerable to that person’s problems. If you’re joint tenant goes bankrupt, your property will be one of their assets. You could lose your home. If they get divorced, your home will be involved. If they have an auto accident without enough insurance, your home could be taken to satisfy a judgment.
- The biggest problem is that you lose control. You want to sell and move? You will need your joint tenant’s signature. Want to refinance? Signatures needed again. What if you change your mind? You can’t change anything without the joint tenant’s signature.
A Will is a one way Ticket to probate Court
There is no way to disburse an estate left by a Will without going through probate.
Your executor will have to hire an attorney. That attorney will likely charge a percentage of the estate as a fee, regardless of the time spent. Queens, NY Probate Planning can drag on for years. Probate is public. That means that everyone who is interested can see your entire estate, including business competitors. Probate fees are expensive. Details must be published in the newspaper. A Will is easy to challenge, even if the challenger has no attorney.
People believe that Wills are cheaper than Living Trusts. This is a misconception. Yes, a simple Will is relatively inexpensive. Most people need much more than a simple Will. By the time you include all the provisions that you need, it is going to cost just as much as a Living Trust. It is true that you can do almost everything in a Will that you can do in a Living Trust. But, if your will is as complete as your Trust, it will be no bargain and will still subject your estate to probate.
