How To Lower Probate Fees And Costs

Being proactive before probate begins is the best way to reduce probate costs.

With that in mind, there are certain strategies you can take to reduce the expenses associated with probate. These either make the process go quicker, or transfer assets outside of the estate’s control.

Understanding Probate Expenses

The probate process involves proving the validity of a deceased person’s last will and managing the distribution of their assets. Reducing probate expenses preserving more value in their estate.

Probate costs can add up during probate proceedings, including:

• Attorney and court fees
• Appraisal fees
• Executor fees

To reduce probate costs, individuals often explore strategies such as:

• Joint tenancy arrangements
• Wills that contain clear instructions
• Beneficiary deeds to avoid probate altogether, minimizing the financial burden of this legal process
• Contacting an attorney to create an estate plan, ensuring that a deceased person’s assets are efficiently distributed
• Tax-exempt gift giving, which lowers the final value of the estate and its corresponding estate tax
• Transferring property into a revocable living trust
  • A revocable living trust is an arrangement that establishes trustees and beneficiaries for property. By specifically dictating these parties, there will be a direct path into who receives what, at time of death. By doing this, probate is skipped entirely. 

Saving Money Before Probate

Creating a Will

Probate will generally go faster if you’ve prepared a will. Dying without a will means one is considered intestate. For intestate deaths, the court will generally need to appoint an administrator who will oversee the estate, attempt to locate assets and heirs, and potentially escheat assets back to the government if no heirs are located.

Establishing Payable-On-Death Registrations

A payable-on-death registration is a financial arrangement that allows for a more efficient distribution of assets, potentially reducing the burden of probate fees. It is an arrangement between a bank or credit union and a client that designates beneficiaries to receive all of the client’s assets.It provides a straightforward method for beneficiaries to access specific purchases without complex legal processes or additional expenses.

An asset beneficiary designation, or a contractual beneficiary designation, can also provide for transferring assets from financial institutions to individuals or to an estate, making the assets distributable in a will.

Using Transfer-On-Death (TOD) Deeds

A beneficiary deed, also known as a death deed, is a legal document that allows property owners to designate a beneficiary to inherit their real estate upon their death through a transfer-on-death arrangement, avoiding the complexities of probate court. Beneficiary deeds can also be a seamless approach for transferring retirement accounts and life insurance policies.

Co-Owning Property While Living

Embracing joint ownership is a practical strategy for minimizing probate costs and streamlining the transfer of assets. When individuals hold property jointly with another party, such as joint tenants, it often allows investments to pass directly to the surviving owner upon the first owner’s death, bypassing the probate process entirely.

Counting On Life Insurance to Minimize Probate Costs

Paying into a life insurance policy, instead of saving cash, can be a strategic way to minimize probate costs. When a person passes away, the insurance proceeds from their policy are typically paid directly to the designated beneficiaries. In most cases, life insurance avoids the probate process and associated court fees.

Keeping Your Estate Plan and Cost Estimates Current

Keeping one’s estate plan up to date ensures that property passes to the correct individuals. 

To stay on top of changes in one’s estate, consult an estate planning attorney who can help navigate probate laws, keep abreast of state regulations, and assess the value of assets. They assist in navigating the legal complexities, ensuring the deceased person’s wishes are followed in advance of the probate process.

Personal representatives or legal experts can estimate potential probate costs for a person’s estate, before or after their death. These expenses will vary depending on the complexity of the estate and the jurisdiction’s regulations, including taxation.

By regularly updating one’s plan, it can help reduce the complexity of the probate process and potentially lower any associated costs incurred on short notice in a moment of crisis. Full representation from a typical probate lawyer costs between $4,000 and $6,000; an attorney who offers unbundled, pay-as-you-go services can also handle the relevant parts of a probate case starting at $500 to $1,500.