Myths of Estate Planning Part II
By Kathleen B. Albrektson (©2003, do not reproduce without written permission)
In our last article we examined some popular “Myths of Estate Planning.” Continuing our series,
remember that a myth is rooted in some fact, but there has been a distortion, so that it has become a
falsehood that is believed as though it were fact.
MYTH #4: IF I HAVE A WILL, I AVOID PROBATE.
WRONG! I am repeating this myth because it is one of the most prevalent myths. You have a lot of
company if you have believed this myth. A will simply allows you to express your final testamentary
wishes. You get to decide who you want your assets to go to and who you want to be in charge of that
process. A judge, through the court process, will assure that your wishes are met. Remember, that
probate costs time and money. The time requirement in San Bernardino County, if everything goes
quite well, is about 1 year and 3 months. The financial cost is about 6% of the value of your probate
estate. (See Myth #5)
MYTH #5:
I AM NOT WEALTHY AND SO I DON’T NEED TO WORRY ABOUT
HAVING A LIVING TRUST.
WRONG! This is a very personal decision for each situation, and may be based upon your age, cash
flow, asset holdings, and desire to make things easy for your heirs. It is important to understand that a
living trust is like a bucket. The law effectively looks at the bucket upon your death and says that
anything in the bucket does not need to be subjected to the probate process. My general rule-of-
thumb is that if your probate assets are worth about $200,000, it may be well worth your while to have
a living trust estate plan, thereby avoiding probate. Take a look at the way probate fees are figured in
the table below:
Range
Estate Value
Total for
Total for
Grand Total
Executor
Attorney
4% of the first $100,000
$
100,000.00
$
4,000.00
$
4,000.00
$
8,000.00
3% of the next $100,000
$
200,000.00
$
7,000.00
$
7,000.00
$
14,000.00
2% of each additional dollar
$
300,000.00
$
9,000.00
$
9,000.00
$
18,000.00
up to $1,000,000
$
500,000.00
$
13,000.00
$
13,000.00
$
26,000.00
$
700,000.00
$
17,000.00
$
17,000.00
$
34,000.00
$
1,000,000.00
$
23,000.00
$
23,000.00
$
46,000.00
1% of each additional dollar
$
10,000,000.00
$
113,000.00
$
113,000.00
$
22,600.00
from $1,000,000 to
$10,000,000
PLEASE NOTE: You will also have court fees and other costs which may be from $1,000-$4,000.
Your probate estate may be subject to extraordinary fees if real estate must be sold or a business must
be managed during the course of the probate proceedings. You may have additional probate fees if
you own real estate in another state.
MYTH #6: I CAN AVOID THE ESTATE PLANNING PROCESS BECAUSE I REALLY
DON’T NEED TO WORRY ABOUT ANYTHING UNTIL MY SPOUSE DIES.
WRONG! What if you’re in a car accident together? Or what if you keep putting it off until you have
lost the capacity to be able to engage in the estate planning process? And do you really want to leave
this to your spouse and not have the opportunity to provide your own input? It is important that a
married couple think through the issues together to determine what they want to do with the assets that
they have worked so hard to accumulate throughout their lives.
I often joke about the skid marks outside my office door which result from one spouse dragging the
other spouse in to see me. It’s alright if you are not equally as excited about the process, or if one of
you will be more involved in completing the “homework” required to get the job done. But don’t put it
off! The well-being of your spouse and your heirs may depend upon your being responsible in this area
of your life. When you die, if your spouse survives you, s/he will have many concerns and should not
have to worry about immediately getting his/her affairs in order.
If you are concerned about the above fee schedule and the other Myths of Estate Planning, I
would advise you to set up an appointment with an estate planning attorney at your earliest
convenience. I normally provide prospective clients with a complimentary 30-minute
appointment during which time we evaluate their need for a trust or a will. You are welcome to
call my office (909-335-9658) if you would like to investigate your needs further.
Albrektson Law Offices
414 Tennessee Street Suite V
Redlands, CA 92373
909-335-9658
