Robert L (Bob) Wenske
909 NE Loop 410
Suite 300
San Antonio, TX 78209
(210) 841-5680 Office
(210) 827-5897 Cell
(210) 828-8066 Fax
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Estate Settlement Costs
What Happens to Your Estate at Death?
At a person's demise, his or her assets are subject to a number of expenses that can significantly reduce the size of the estate left for the heirs. Proper estate planning can minimize these expenses and determine in advance how the costs that remain will be paid.
An appraisal of estate assets such as personal property, real estate, life insurance, and business interest totaled and from this is subtracted death taxes, accounting fees, appraiser's fees, probate expenses, and executor's commissions. What is left over goes to your heirs.
Proper estate planning will get more to your loved ones.
Estate Settlement Costs
Shortly after the death of an individual, certain costs of settling the estate must be paid in cash. Two primary goals of estate planning are to minimize these costs and decide in advance how the costs that remain will be paid.
Estate Settlement Costs
Decedent's last illness, funeral and burial expenses and debts
Probate administration expenses (see below): Expenses include attorney's fees, executor's commissions, appraiser's fees, court costs, tax return preparation, etc. Some states determine the fees based on the value of the assets passing through probate. Assets that typically do not pass through probate would include: joint tenancy, life insurance, assets in living trusts, etc.
Death taxes: A federal estate tax is imposed on estates exceeding the applicable exclusion amount of $1,500,000.' Individual states may also impose an inheritance or estate tax.
Probate Administration Fees2
|
Probate Assets |
Fee to
Each |
Probate Assets |
Fee to
Each |
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$10,000 |
$400 |
$700,000 |
$15,150 |
|
$40,000 |
$1,350 |
$725,000 |
$15,650 |
|
$80,000 |
$2,550 |
$750,000 |
$16,150 |
|
$100,000 |
$3,150 |
$775,000 |
$16,650 |
|
$120,000 |
$3,550 |
$800,000 |
$17,150 |
|
$160,000 |
$4,350 |
$850,000 |
$18,150 |
|
$200,000 |
$5,150 |
$900,000 |
$19,150 |
|
$250,000 |
$6,150 |
$925,000 |
$19,650 |
|
$300,000 |
$7,150 |
$950,000 |
$20,150 |
|
$350,000 |
$8,150 |
$1,000,000 |
$21,150 |
|
$400,000 |
$9,150 |
$1,200,000 |
$23,150 |
|
$450,000 |
$10,150 |
$1,400,000 |
$25,150 |
|
$500,000 |
$11,150 |
$1,600,000 |
$27,150 |
|
$550,000 |
$12,150 |
$l,800,000 |
$29,150 |
|
$575,000 |
$12,650 |
$2,000,000 |
$31,150 |
|
$600,000 |
$13,150 |
$3,000,000 |
$41,150 |
|
$625,000 |
$13,650 |
$4,000,000 |
$51,150 |
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$650,000 |
$14,150 |
$5,000,000' |
$61,150 |
|
$675,000 |
$14,650 |
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Typical Statutory Formula
4% on the 1st $15,000 3% on the next $85,000 2% on the next $900,000 1% on amount over $1,000,000
1 The applicable exclusion amount ($1,500,000 in 2004 and 2005) is the dollar value of assets protected from federal estate tax by an individual's applicable credit amount. It is scheduled to change as follows: $2,000,000 for 2006-2008; $3,500,000 for 2009, zero federal estate tax for the year 2010; and $1,000,000 for 2011 and thereafter (unless permanently repealed or otherwise modified).
2 This table illustrates typical statutory attorney's fees and executor's commissions for probating an estate. 3 In excess of $5,000,000 add 1% of the excess to $61,150.
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