Death could always be around the corner. The death of a loved one that takes everyone by surprise should not also cause a financial surprise to the loved one’s estate. Unfortunately, too many people are unaware of the potential costs and fees associated with the probate of an estate or administration of a trust.
When an estate goes through probate, Florida law allows the attorney administering probate to collect a fee. For smaller estates, this fee is modest—around $1,500. However, estates valued at $100,000 or more are assigned attorney fees based on percentages. An attorney can charge 3% on estates valued up to $1 million, 2.5% for estates between $1 million and $3 million, and 2% for estates between $3 million and $5 million.
Even if the directions in an estate plan or will are fairly straightforward, an eight-figure estate could cost heirs $400,000 or more in attorney fees. If an estate is valued at $10 million or more, an attorney can charge 1% of the total value of assets, putting a small fortune in their pocket in the process. Keep in mind, these fees are the baseline for what is considered “reasonable”. If an estate is contested or if there are many items, properties, or businesses that needs appraisals, the fees can be adjusted (often upward!)
Indeed, some Florida attorneys will even lowball their estate planning fees if they are allowed to handle the probate because they know the larger value is in administering the estate. Our estate planning firm saves you the cost of future attorney fees by minimizing disputes and ensuring that your assets are properly shielded from probate proceedings. Also, we strive to be as transparent as possible with our fee structures.
I had a married couple come in for an estate planning review. They had purchased inexpensive wills from a prior attorney that said everything should be divided among their three adult children. They had roughly $2.5 million in assets, and with a will-based estate plan, the estate would have to go through probate. I told them that a Florida probate attorney could legally charge approximately $62,500 in fees. Their jaws dropped. That $500 will, actually bought a huge future expense for their heirs. I redid their plan to be trust-based, lowering their future attorney’s potential probate fee to a small fraction of the original projected cost.
Another client, a government employee, came in with an existing plan that cost quite a bit of money to put together. The client thought that the bulk of his estate contained his five-figure salary and retirement fund, which his son was set to inherit under an “ages and stages” plan. After I reviewed the estate plan and did a little digging, I discovered he actually had $1 million in assets that could have amassed a minimum $30,000 probate fee. I was able to perform comprehensive protection planning, including restructuring the son’s trust disbursements to prevent trust funds from being named as a marital asset in a future marriage. Most likely, any future probate fee would be significantly less than what was estimated when the client first arrived in my office.
Case Story 3: What to Do If Your Money Is All Virtual
I was approached to create an estate plan for a tech entrepreneur. The client did not have an existing plan, despite having over a million dollars in assets. However, the bulk of these assets were in cryptocurrency—and without an estate plan, the balance of his digital currencies could have been passed to anyone who had his login and passwords. As digital currencies are relatively new, only a handful of states have laws to address digital assets. Including those assets in an estate plan is a more challenging concept. I funded a trust with assets, with guidance from a statute that specifically addresses digital currencies and asset in order to take advantage of that state’s cryptocurrency laws. This will help to ensure that the bulk of the client’s wealth would not be considered as part of the probate estate.
If You Don’t Buy Now, Can You Afford to Pay Later?
Florida’s probate attorney fees are often just the tip of the iceberg when it comes to potential costs after your passing. In some cases, an attorney may charge an hourly rate if the probate proceedings are time-consuming or complicated. If your beneficiaries start fighting among themselves, just start the meter: all of their attorneys will charge by the hour.
The amount your heirs could end up paying adds up quickly, which is why it is so important to start estate planning now. Call our office today to schedule a strategic family planning session.
The above result is representative of a client’s experience and is not a guarantee of legal recovery. Results will vary based on the specific details of every case. All names have been changed to protect the identities of our clients.