Choosing between estate planning and probate is important for protecting your family, assets, property and heirs, especially in states like California where the costs of both can significantly impact the legacy one leaves behind.
The cost of probate in California is largely determined as a percentage of the estate’s value, which can quickly become expensive, especially for substantial estates. Probate encompasses various expenses, including but not limited to court filing fees, attorneys’ fees, and administrative costs, all of which can diminish the value of the estate handed down to heirs.
In contrast, the costs for estate planning in California are often fixed – minus fees for legal advice and document preparation — and not tied to the estate’s value. More importantly, estate planning provides a strategic means of protecting your family from the uncertainties and financial strain of probate, ensuring that your assets and property are distributed according to your wishes.
Doing the calculations
Probate fees in California are notorious for their potential to consume a significant portion of the estate’s value. These fees are structured in a way that benefits the legal and court system, with a percentage-based fee scale that escalates with the estate’s value. For instance, probate fees can include a percentage of the estate’s gross value, court filing fees, and substantial attorneys’ fees, all of which are subject to the total value of the estate being probated.
In contrast, the initial costs of estate planning might seem significant but are relatively minor when viewed as an investment in your family’s future and peace of mind. These costs are straightforward and provide a clear picture of the financial commitment involved in creating a comprehensive estate plan, including wills, powers of attorney, and potentially, a living trust.
How a living trust could save you tens of thousands of dollars
If you’re considering estate planning, you might wonder how much a living trust costs in California. Setting up a living trust in California involves initial legal fees, but these are small compared to potential probate fees based on the value of the estate. Furthermore, a living trust bypasses probate entirely, allowing for the direct and immediate transfer of assets to heirs upon the grantor’s death. This not only streamlines distribution but also ensures privacy and protects the estate from probate fees.
The choice between estate planning and probate in California is clear when considering which is more expensive in the long run. Although more costly upfront, a living trust ultimately preserves more of your estate for your heirs, avoiding the expensive and public probate process. Investing in estate planning is an investment in the future — securing your legacy and providing for your loved ones for generations to come.