The Real Cost Of A Will
When folks start out their estate planning journey, they often ask “How much does a Will cost?” This is an understandable question, but it comes with a ton of baggage. While a Will serves as a part of a comprehensive estate plan, it’s far from the only (or even the most important) document. People often confuse having a Will with having an affordable estate plan. Unfortunately, the cost of a Will are the many hidden fees that a less diligent estate planner may sweep under the rug.
What is a Will?
A Will is a document that allows your estate to pass through probate court. One of the big misconceptions about estate planning, and Wills in general, is that they are simply read and acted on. Unfortunately, this Hollywood view of a Will is wildly out of step with reality. A Will is a guide for the executor and probate court to follow to distribute assets to the surviving loved ones. Anyone acting on a Will must do so through probate court.
In short, if an estate plan is centered around a Will, there is almost guaranteed to be probate.
Hidden Cost Of A Will?
Because of the core nature of the document, a Will is frequently one of the most inexpensive documents to initially draft.
I say initially because the fees down the road can mount quickly. Probate is expensive. Even small estates can quickly rack up court costs, and larger ones by their very nature could mean thousands upon thousands of dollars lost from a family. A Will-centric estate plan can easily loose between 4% and 10% of a family’s total inheritance. This loss can come from court costs, executor fees, attorney fees, and more.
What’s the Solution?
Naturally, you want to save your family (and potentially yourself) money in the long run. There are two ways to go about doing this. The first, and much more dangerous, is to assign accounts and property to be Pay On Death or Transfer On Death. The problem with this method is that it is trivial to accidentally disinherit swaths of your family due to forgetfulness and an untimely passing. This is compounded by the fact that these assets can still be counted in probate if it isn’t done perfectly. Unfortunately, there is no way to get outside help with this method, so missing something is almost a certainty.
The other, more reliable method is to use Trust planning as a planning component. A Trust acts as a separate legal entity that holds onto your assets. This gives you the flexibility and access to assets as if they were in your name with NONE of the concerns of probate. It also grants you the freedom to be able to update a single document to dictate where assets go (rather than all of your bank accounts and deeds into perpetuity). It still needs to be done perfectly to work correctly, but because drafting a Trust would include a legal professional, that second set of eyes will likely catch any mistakes made.
It's that simple. Will centric planning sets your family up for time and expense in probate court. While TOD and POD planning is possible, it’s dangerous and can shatter a family with fighting. The secret cost of a will are the fees you pass on as your legacy. Your safest bet to ensure an easy time for loved ones is to work with a legal professional to draft a Trust-based estate plan. If you want to step up and take responsibility for your family’s well-being today, give us a call at 419-352-7522 to start the process today.