Mike Collins: I am Estate Planning Attorney Mike Collins, and we're going to start now to address the principle issues you need to have in mind when you approach your own personal estate planning. What motivates so many people to get started with their own personal estate planning is this desire to avoid probate. The truth is most states in recent years have taken a step to simplify, expedite the probate process. In most places, probate is not as expensive, it's not as time-consuming, as burdensome; the overwhelming majority of us don't need probate in the first place.
Now there are exceptions. In most probate systems, there are mechanisms for resolving creditor issues. Probate is easy to avoid. So the obvious questions become, why do we want to avoid it? How long does it take today? What does it cost nowadays, is there some due date, some deadline, don't they have to wind this thing up before I need probate myself? The answer is no. Probate is a process. Frankly, mostly you shuffle a bunch of papers and until those steps are completed, yeah, the administration can just well drag on and on.
Typically, we'll estimate between nine months and two years which by the way I know is pretty wide range; two years more than twice as long as nine months, then it depend largely on whether or not any death taxes are due, how much does it cost? Well, in some states, they have what's called a statutory fee system. This is a law that says if the probate estate is this large; the minimum fees will be this much.
You can calculate it to the penny if you are that interested once the inventory is filed in the estate. There are usually guidelines in those jurisdictions. In our firm, we usually estimate somewhere in the 3-4% range, 3-4% of the value of the probate estate for the cost and the fee. So it's not all the money in the world, but when you consider what you're paying for, then all it does is slow you down, and mostly you don't need it, why would you ever voluntarily go through probate?
So let's avoid the process if we can; save the time, save the money, but here's the most important thing I want you to remember about probate. It is not the most important element of your estate plan. Avoiding probate does not save a dime of death tax. So it's not a tax issue at all, probate and taxes are entirely separate issues. We want to avoid it, but it's a beginning of the trail, not the end of the trail. So let's avoid probate, let's save the time, let's save the money, and get onto more important concerns.