Many people think that if they have a Will, they have planned enough, and do not need to go to the time and expense of further planning. However, once someone has obtained sufficient assets (which isn’t hard in this day and age), a Will may not be enough.
If the gross value (note that it does not matter how encumbered the asset is) of assets not held in the form of ownership which provides a right of survivorship (i.e. joint tenancy, life insurance and IRAs), and not held in a Living Trust, is greater than $100,000 , then those assets must be probated .
The fact that someone has a Will does not
keep the estate from needing to be probated.
Probate requires court intervention and approval of many steps of the estate settlement and administration process, which will take at least one to one and one-half years to complete. Probate provides statutory fees for attorneys and executors of the estate which are based upon the size of the estate. The statutory fees are as follows:
|1st $100,000 - 4% of gross value of estate||2nd $100,000 - 3% of gross value of estate|
|Next $800,000 - 2% of the gross value of estate||Next $9,000,000 - 1% of gross value of estate|
|Next $15,000,000 - 0.5% of gross value of estate|
If assets are held in forms of ownership which do not require a probate, the estate can be settled and administered without court intervention and, depending on the size of the estate and type of assets held therein, can be administered in a matter of months . Also, attorney’s fees usually are based on the amount of work performed to settle and administer the estate, not the size of the estate. This can be must less costly than if the estate needed to probate.
For example, if an estate had a gross value of $200,000, the statutory compensation would equal $7,000. The same estate held in a Living Trust on average would cost approximately $2,000-$3,000. If an estate had a gross value of $1,000,000, the statutory compensation would equal $23,000 . The same estate held in a Living Trust, under the right circumstances, could be administered for as little as $5,000; possibly less.
Apart from costs and time of administration, estate taxes also become a concern. Although a Living Trust does not provide any more tax protection than a Will for a single person, the Living Trust can provide a great tax advantage for married couples with larger estates, by, in essence, doubling the Unified Tax Credit available for a decedent’s estate. Learn more about our Wyoming law firm here.