A Will is the first step, but to protect your assets you need more
A Will requires the least immediate effort and this is its primary advantage.
Other considerations involved with relying solely upon a Will, and consequently some potential disadvantages, include:
- Since no present asset transfers are made, if you become ill or lose mental capacity there is no plan or provision for the management and protection of your assets.
- For the Will to ultimately be effective, it must be “probated” (proven and established as valid). This can result in delays in actually distributing assets due to the formality of the Court administered probate process.
- By law in New York, a probate Estate must remain open for a minimum of seven months. With good legal advice, the entire time from death to final estate settlement generally requires about a year. While the estate must remain open for that time, often most of the assets can be distributed as soon as the Executor feels comfortable that all debts, bills and expenses are provided for.
The costs of settling a probate estate can be substantial. The primary probate costs are as follows:
- Court Fees: If the estate assets are worth between $300,001.00 and $500,000.00, the court fees will be at least $1,000.00 and potentially $1,500.00. If the estate assets are greater than $500,000.00, the court fees will be at least $2,000.00 and potentially $3,000.00. Smaller estates will pay smaller fees. Estates involving any litigation will pay greater fees.
- Executor’s Commissions: These are fixed by law at 5% of the first $100,000.00 of estate assets, 4% of the next $200,000.00, 3% of the next $700,000.00, and 2.5% of the next $4,000,000.00. (Note: If a family member is serving as Executor, these fees will at worst be paid to that family member or may be waived).
- Attorneys Fees: There is no fixed percentage payable to attorneys or other professionals (accountants, appraisers, etc.). While the actual fees will depend upon the work required, the fees for all professionals can be roughly estimated at about 4% of the total estate.