Now that the economy is recovering, many people are taking a look at their assets and looking for ways to preserve what they have and how to provide for their loved ones when their gone. That process is called “Estate Planning”. Here at BPE Law, we’ve been providing Estate Planning services to our clients for over 20 years. But still, most people don’t know what it all means.
This week, we’re starting a series of Articles to teach you what you need to know about Estate Planning and why it is so important for you and your family.
What is Estate Planning?
Every one of us has an “Estate” of some kind… a home, maybe some investments, money in the bank, insurance, a business, etc. Estate Planning is simply the process of creating certain documents that will enable you to preserve your Estate and pass it on to your heirs and beneficiaries as intact as possible. Why is this important? Because if you don’t plan ahead, your Estate may get chopped up by the ravages of Probate costs, attorneys fees, estate Taxes, and other avoidable time delays in distributing your property to your heirs. Simply put, it is devising an effective method that will allow as much of your estate as possible to be preserved and passed on to your heirs and beneficiaries, without all of the costs and headaches. And the two biggest dangers are Probate and Estate Taxes.
What is Probate and Why Do You Want to Avoid It?
Probate is simply the legal process by which a Court decides who is going to control and receive your assets when you die.. or even if you are incapacitated. If you have no Estate Plan at all or even if you one have a Will, Probate will be required. The biggest problem with Probate is that it’s expensive. How expensive? Well, it’s virtually impossible to do Probate today without an attorney and those Probate Attorney fees are set by law. They are 4% of the first $100,000; 3% of the next $100,000; 2% of the next $800,000; then a sliding scale after that. Most importantly, the Probate attorney fees are tied to the gross value of your Estate, not the net. So, if all you have is a home worth $400,000, the attorney fees alone would be $11,000 plus court costs and expenses of another $2,500. In contrast, an average estate plan will cost …read more