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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Potential Savings by Avoiding Probate
The table below illustrates the potential savings realized by not having to pay the expenses typically associated with passing an estate through the probate process. Changing title to assets so that property transfers automatically at death, naming beneficiaries for assets such as life insurance or retirement plans, or using a revocable living trust are effective ways of achieving these potential savings.
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Estate
Size (A) |
Total
Estate Settlement Costs With
Probate' W/O Probate z (B)
(C) |
Potential Savings (D
= B _ C) |
|
|
$1,000,000 |
$60,000 |
$10,000 |
$50,000 |
|
$1,500,000 |
$85,000 |
$I0,000 |
$75,000 |
|
$2,000,000 |
$285,500 |
$230,500 |
$55,000 |
|
$2,500,000 |
$535,200 |
$470,200 |
$65,000 |
|
$3,000,000 |
$788,200 |
$710,200 |
$78,000 |
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$3,500,000 |
$1,041,200 |
$950,200 |
$91,000 |
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$4,000,000 |
$1,294,200 |
$1,190,200 |
$104,000 |
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$5,000,000 |
$1,800,200 |
$1,670,200 |
$130,000 |
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$6,000,000 |
$2,306,200 |
$2,150,200 |
$156,000 |
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$8,000,000 |
$3,318,200 |
$3,110,200 |
$208,000 |
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$10,000,000 |
$4,330,200 |
$4,070,200 |
$260,000 |
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$15,000,000 |
$6,860,200 |
$6,470,200 |
$390,000 |
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$20,000,000 |
$9,390,200 |
$8,870,200 |
$520,000 |
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$30,000,000 |
$14,450,200 |
$13,670,200 |
$780,000 |
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$40,000,000 |
$19,510,200 |
$18,470,200 |
$1,040,000 |
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$50,000,000 |
$24,570,200 |
$23,270,200 |
$1,300,000 |
|
$100,000,000 |
$49,870,200 |
$47,270,200 |
$2,600,000 |
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.
1 Federal estate tax, plus administration expenses assumed to be $10,000 for last illness and burial costs, plus probate equal to 5% of the estate. The actual total cost could be more or less than the amount shown.
2
Federal estate tax, plus administration expenses 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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