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 Planning
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Wenco Financial Advisors Inc. |
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The High Cost of Dying When Estate is Not Probated Assumes Death Occurs During 2004
Successfully avoiding probate can result in a larger inheritance for beneficiaries and heirs. Holding title to property in forms such as Joint Tenancy, Community Property with Right of Survivorship, and Transfer on Death is one way to achieve this. Naming a beneficiary for assets such as life insurance or retirement plan accounts, where the property is transferred automatically by contract, is another. A third way to effectively avoid probate is by setting up a revocable living trust (also called an inter-vivos trust).
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Estate
Size (A) |
Admin Expense' (B) |
Taxable
Estate (C=A-B) |
Federal
Estate Taxes (D) |
Total
Costs (E=B+D) |
|
$1,000,000 |
$10,000 |
$990,000 |
$0 |
$10,000 |
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$1,500,000 |
510,000 |
51,490,000 |
$0 |
510,000 |
|
$2,000,000 |
S10,000 |
$1,990,000 |
$220,500 |
$230,500 |
|
$2,500,000 |
S10,000 |
$2,490,000 |
S460,200 |
$470,200 |
|
$3,000,000 |
S10,000 |
$2,990,000 |
5700,200 |
$710,200 |
|
$3,500,000 |
S10,000 |
$3,490,000 |
S940,200 |
$950,200 |
|
$4,000,000 |
S10,000 |
$3,990,000 |
S1,180,200 |
$1,190,200 |
|
$5,000,000 |
S10,000 |
$4,990,000 |
S1,660,200 |
S1,670,200 |
|
$6,000,000 |
510,000 |
$5,990,000 |
S2,140,200 |
52,150,200 |
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$8,000,000 |
S10,000 |
$7,990,000 |
53,100,200 |
S3,1
10,200 |
|
$10,000,000 |
510,000 |
$9,990,000 |
$4,060,200 |
54,070,200 |
|
$15,000,000 |
S10,000 |
$14,990,000 |
56,460,200 |
S6,470,200 |
|
$20,000,000 |
510,000 |
$19,990,000 |
$8,860,200 |
58,870,200 |
|
$30,000,000 |
S10,000 |
529,990,000 |
$13,660,200 |
$13,670,200 |
|
$40,000,000 |
S10,000 |
$39,990,000 |
$18,460,200 |
$18,470,200 |
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$50,000,000 |
S10,000 |
S49,990,000 |
$23,260,200 |
$23,270,200 |
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$100,000,000 |
S10,000 |
$99,990,000 |
$47,260,200 |
$47,270,200 |
Note: Under the Tax Act of 2001, the federal estate tax is gradually phased out until its final repeal in the year 2010. If Congress does not act at that time to repeal it for the years following, it will automatically revert back to the rates in effect during the year 2001, with an exemption for the first $1,000,000 of assets.
The top bracket will reduce as follows: 49% in 2003; 48% in 2004; 47% in 2005; 46% in 2006; 45% from 2007 through 2009; and zero taxes in 2010. If Congress does not act at that time to repeal the federal estate tax for the years following, in the year 2011 the top bracket of 55% will automatically return.
' Administration expenses are assumed to be $10,000 for last illness and burial costs. There would likely be some charges for appraisal fees, tax return preparation and other miscellaneous expenses. The actual total cost could be more or less than the amount shown.
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