Millions of Americans work hard every day to build their nest egg and achieve financial security in their day to day lives; however, a large number of Americans fail to establish how their hard earned property will be distributed to their loved ones after they have passed. As a probate attorney, I am constantly surprised and frustrated by the number of individuals with both small and large estates that fail to execute a will or establish a trust to manage and distribute their assets after their death.
I will provide a brief introduction below of the characteristics of wills and trusts including the benefits and differences of each. Furthermore, I will highlight the effects and hardships that lay ahead should you fail to execute a will or organize a trust to handle your estate. This blog post is published in three sections.
Let me begin by saying that failing to execute a will dramatically increases the cost to your estate when time comes to probate. I have seen a cost of nearly $30,000.00 or more to probate an approximately $500,000.00 intestate estate (estate without a will). On the opposite end of the spectrum, I have seen estates organized under a will (testate estate) probated for around $4,000.00. This particular testate estate consisted of approximately $4,000,000.00 in assets.
While there is a great gulf between the value of these two estates, I still consider them sizeable as they provide a substantial sum to be distributed after the death of the decedent. Smaller estates of $200,000.00 to $150,000.00, depending on the number of heirs, children from previous marriages, character of the property, and other variables, may be substantially depleted due to the cost of probating the estate without a will and/or trust. Much of this cost differentiation is associated with the extensive oversight and approval required to probate intestate estates along with the administrative costs of communicating and reaching approval of all heirs when no executor has been assigned under a will.