Can you afford not to have an estate plan?
Can you afford not to have an Estate Plan?
You’ve worked your entire life to provide for yourself and your family. What’s it worth to avoid unnecessary expenses and headaches for your loved ones?
What is your estate?
Everybody has an estate, not just the wealthy. Typical items that are considered part of an individual or family estate include:
• Family homes, land, and other real estate
• Cash, savings, bonds, coins
• Personal property like art and jewelry
• Cars, motorcycles, and boats
• Life insurance policies
• Bank accounts – checking, savings, mutual funds
• Retirement accounts – 401K, 403B, IRA
• Stocks, bonds, and other investment tools
• Business ownership
What is the value of your estate?
The average net worth of a South Bay family is $750,000.
• Carson – $568,342
• San Pedro – $658,731
• Lomita – $660,902
• Torrance – $713,514
• Redondo Beach – $873,420
• Rancho Palos Verdes – $1,085,698
Why you need an estate plan
If you own assets valued at more than $150,000 or have real property (house, condo, land) valued at more than $50,000, probate will be required when you die – even if you have a last will and testament. The attorney’s and executor’s fees and other costs for the probate process must be paid by your estate and can be quite substantial. But the probate process can be avoided with a well-designed estate plan.
How much does probate cost?
The attorney’s fees, executor’s fees, and court costs for probate are set by state law, and are based on the value of your estate.
Typical probate costs:
• Attorney’s fees: $18,000
• Executor’s fees: $18,000
• Total fees deducted from your estate: $36,000
(based on typical South Bay homeowner with $750K estate)
Other costs:
• Probate court filing fee: $435
• Probate referee: 1% of the value of items which must be appraised (homes, land, valuable collectibles, etc.)
More reasons to avoid probate
• The duration of probate case is 9 – 18 months minimum
• Probate court records are open to the public so anyone can see what your estate was worth and who inherited your assets
How can you avoid probate?
You can avoid the time and expense of probabte by having an attorney prepare an estate plan.
Average cost: $2,000
Average savings: $34,000
(based on typical South Bay homeowner with $750K estate)
An estate planning attorney will charge about $500 for the most basic estate plan to more than $5,000 for complex plans.
Additional benefits of estate planning
• Estate planning can ensure your minor children have guardians appointed based on your wishes.
• Estate planning can help you avoid court-appointed conservatorship if you become incapable of making your own medical or financial decisions.
• Proper planning can help you avoid federal estate taxes if you have a large estate; the IRS collects 40% of estate value which exceeds $5,340,000.
• Estate planning is for anyone who does not want to burden their families with costly legal fees or delays in the future.
If you are interested in protecting your assets and ensuring the financial security of your loved ones upon your passing, speak to experienced estate planning attorney Barbara Craig to discuss a comprehensive estate plan.