Probate Fees Can Be Minimized
Everyone knows the old saying, “nothing is as real as death and taxes.” Even after you have died, taxes continue to accrue. Probate fees are taxes, and there are ways that these taxes can be minimized upon your demise.
When you die, there is a requirement that your will be approved by the courts; this is what is known as Texas will probate. This process will first confirm your executor and then give specifications for the documents that are required to complete the probate process.
Although there may be rare exceptions, all wills have to go through probate. When the probate process is completed, the executor is granted the right to distribute the deceased person’s assets in accordance with the provisions of the will.
In most jurisdictions, a charge is levied for probating the will; in some states the fees can be as high as 1.5% of the asset base. Although it is considered a fee, in the eyes of many it is seen as an additional tax. The fees are used for administrative purposes such as notary services.
If your estate is small, attempting to minimize fees is not cost effective. Depending on your personal situation, a Texas will probate cost may be minimized by the use of a few carefully thought out strategies.
* If you name beneficiaries of your retirement savings plan or any insurance policies, these amounts are exempt from probate fees. By designating a beneficiary, these assets are outside the scope of your estate and the proceeds will pass directly to the named account beneficiaries.
* Those assets that are owned jointly, as long as they have right of survivorship, will pass by your estate and go directly to the co-owner of the asset.
* There can be no Texas will probate cost on assets you do not own. Under certain circumstances giving assets away prior to your death may make sense but these gifts should not be given simply to escape probate fees. If, in your mind, the gift fits with your intention of providing assistance today for your rightful heirs, and the gift will not be detrimental in your providing for yourself until your death, then it may make sense. If you do grant assets as gifts, those which have appreciated in value may give rise to capital gains tax, so it is advisable to investigate this particular ramification as well.
* Many people find that establishing a trust, where the assets of the trust are dealt with in accordance with the terms of the trust and not as a part of the estate, escape probate and as a result escape probate fees. Placing your assets in a testamentary trust will avoid probate when your spouse dies as well.
When a loved one dies, the last thing you want to worry about is the distribution of their estate. A soundly written Texas will probate will ensure a smooth settlement in line with the wishes of the deceased.