Probate can surprise many Texas residents with unexpected costs. Most people don’t realize that probate expenses come directly from the estate’s assets before any distribution to beneficiaries.
On one hand, your beneficiaries don’t have to shoulder the probate costs. On the other hand, the inheritance you leave them can shrink because of various probate fees. Proper planning can help protect your family’s inheritance from excessive probate expenses.
Surprising fees that add up
Probate isn’t just about court filings. You might face various costs that aren’t immediately obvious. Common hidden expenses may include:
- Appraisal fees: Determining the value of property and assets incurs charges.
- Accounting costs: Managing the estate’s finances requires professional assistance and fees, which can go over $1,000 depending on estate complexity.
- Bond premiums: Executors may need to post a bond, which comes with premiums starting at around 0.5%.
- Legal fees: Working with a skilled attorney can make the probate process smoother, though this adds to the fees paid through the estate.
- Publication fees: Texas law requires public notices of probate, which can cost between $200 and $500, depending on your county and publication rates.
- Executor compensation: Texas law allows executors to claim up to 5% of estate receipts and disbursements as payment for managing the estate.
These costs quickly accumulate, reducing the inheritance your beneficiaries receive. Moreover, if someone contests the probate, your beneficiaries may need to pay litigation fees. The fees can quickly skyrocket and may potentially be reimbursed from the estate. This further reduces what your heirs get.
Taking steps to minimize probate costs
You can take steps now to reduce future probate costs for your loved ones. For example, a living trust allows many assets to skip probate entirely. Naming beneficiaries directly on accounts and insurance policies will also help you avoid probate costs.
A qualified Texas estate planning attorney can recommend strategies tailored to your needs. They may also help ensure a smooth proceeding if your estate needs to go through probate.