The good news is that with some legal help, you can altogether avoid probate for your family. The bad news is that if you don’t make a plan, your estate will go through probate and all of the associated costs when you pass away. Instead, learn how to avoid probate in all of its complexity and expense.
In North Carolina, if your estate is worth less than $20,000 as a single person or $30,000 as a couple, your family can file an affidavit to avoid probate. However, many of us have more equity than this in just our homes. When you count the value of cars, jewelry, and retirement accounts, it all adds up quickly.
What are the Costs of Probate?
There are many categories of expenses that you may pay. Some may be higher cost than others depending on your unique situation.
If your estate is subject to probate, you and others who make a claim may need attorneys to fight for your rights. Many stories tell of family members pitted against each other who used up the estate’s value on attorneys fees to argue over who should get what. If just one family member continues to fight for everything in court, the rest of the family pays in emotional turmoil and equity.
Executors and Estate Administrators
Executors and administrators also take a cut of the entire estate for the work they do. Their job is to value and inventory the estate. They are also personally responsible for paying the taxes. If they get it wrong, the state can personally sue them. In North Carolina, it is normal for an executor to receive a commission of up to 5% of the estate assets.
Appraisers do the work of valuing expensive antiques or jewelry. They may also value a business, boat, vacation home, or vehicle. No matter what they look at, there will always be a price tag associated with their services. Some appraisers make close to $50 per hour.
Accountants are often necessary when handling an estate due to the complexity of filing taxes for someone other than yourself. There are usually income taxes. However, there can also be estate taxes and trust taxes due each year in a more complicated estate. Unless the executor or administrator is a financial guru, they may need the help of an accountant to wade through these necessary financial tasks.
Courts charge fees for their services also. In North Carolina, you can expect the estate to pay up to $6,000 in fees for the judge and clerk’s services. These fees can cut into the estate and lower the amounts that heirs receive. If it is possible to settle your estate before you pass away, your family can avoid paying the associated court expenses.
Avoid the Expense of Probate
Avoiding probate can save you and your family much-needed money and avoid emotionally draining court dates. Depending on the probate’s complexity, fees can run into tens of thousands of dollars. However, you can avoid probate costs by avoiding probate. It’s that simple.
Look at the possibilities listed below and talk with your attorney about which strategies may help your estate avoid probate.
Name Your Beneficiaries
The probate process determines who gets what when there is no beneficiary designation. So, naming a beneficiary is the easiest way to avoid probate. Common beneficiary designation assets include:
- Life insurance
- Retirement plans
Create and Fund a Revocable Living Trust
A revocable living trust owns your property, yet you remain in charge of all legal decisions until your death. After your death, your named trustee manages your assets – according to your wishes. A trust works well if properly created and funded by an experienced estate planning attorney.
Own Property Jointly
Avoid probate by making the property you own held jointly with a right of survivorship. There are several ways that you can establish joint ownership of property, such as:
- Joint tenancy with right of survivorship – ownership simply transfers to other owners upon your death. No probate is necessary. Joint tenancy and ownership work for those who acquire real estate, vehicles, and bank accounts together.
- Tenancy by its entirety – is a form of joint tenancy with the right of survivorship that is only applicable for married couples in North Carolina.
Avoid More Than Expenses
Probate is a public court process that allows anyone and everyone to make claims on your estate. The public can also plainly see what your estate is worth. Having such a public process to go through can be difficult for the family members left. Your estate can also publicly need to fight against businesses or relatives that make claims against your estate.
We Can Help
At Hopler, Wilms, and Hanna, our experienced probate attorneys can help you decide the best ways to avoid probate for your particular estate. Every case is different depending on what you own and how you own the property. Often, it is a simple process to place all of your property into a living trust or to name beneficiaries and make joint accounts correctly. Whatever you need, you can rest assured that we are on your side and want the best scenario for your estate.
Contact our office today online or by phone. We’ll help you decide whether it makes sense to avoid probate in your particular case and, if so, the best way to do so.