Most people do not realize the incredible complexity and time invested in a typical probate proceeding. Often, clients come to us thinking that the process of honoring the decedent’s will is about getting assets to appropriate beneficiaries as quickly as possible, when in reality probate is about ensuring that taxes, creditors and other interested parties are paid prior to the beneficiaries receiving any money. A statutory waiting period for 5-9 months (depending on the state) usually applies to all payments to beneficiaries, once the probate petition has been drafted and filed and approved, which can take several months.
Estimated Savings With a Trust = $17,850
The data on the left assumes things run smoothly. Factors leading to additional costs include:
• Multiple Accounts
• Large Number of Beneficiaries
• Disputes over Bequests and Litigation
• Environmental Problems
• Missing Beneficiaries/Genealogical Research
• Extensive Creditor Claims
• Delinquent Income Tax Compliance
• Real Estate Title Issues
• Judicial Accounting, if required
• Charitable Bequests and Attorney General Intervention
Opportunity Cost:
While this money is tied up in an estate, you cannot use it to:
• Pay down mortgage loans
• Pay down car loans
• Pay down student loans
• Pay down credit cards
• Invest
The opportunity cost on a $1M estate might be close to $5,000 per month while it is open. Larger estates would likely be proportionally greater. A typical probate proceeding lasts 1-2 years and sometimes longer, whereas a well-drafted trust can largely be distributed in a matter of months. What do you want your legacy to be? Headaches and bureaucracy or speed and efficiency? Let us help you design an estate plan that steers clear of probate potholes. Please also refer to our Will vs. Trust Worksheet at: www.docrlaw.com/how-trusts-save-you-time-and-money
DID YOU KNOW? Right now, only 1 out of 11 calls are getting through to the IRS. As a result, administering estates can be even more costly and time-consuming. A trust can help you avoid taxes and the necessity of paying someone to keep you on hold for hours. For more information, follow: www.politico.com/news/2021/02/16/irs-tax-season-469182