When you’ve worked so hard your entire life, you want to leave as much inheritance as possible to the people you love and care about. And this underpins the essence of estate planning.
However, the process of probating estate upon your demise can be quite costly. If you are concerned about this cost, then it makes sense to ask what you can do to bring down or eliminate probate costs altogether.
What makes up probate costs?
Generally, the cost of probating your estate boils down to the size of your estate, your liabilities as well as the clarity and legal validity of your estate planning documents like the will and trust. That said, here are some of the fees that make up the probate cost:
- Court fees: These range from filing fees to publishing public notifications
- Bonds: These go towards the court-approved estate trustee, administrator and executor
- Taxes: Colorado doesn’t impose an inherence tax. However, income realized from your properties or retirement funds is subject to taxation.
- Professional services: Subject to the complexity of your estate, your estate’s executor or administrator might want to engage the services of appraisers, accountants and legal professionals. All these will definitely cost money.
As you can see, the cost of probating your estate can add up pretty quickly. Fortunately, here are a couple of steps you can take to bring down the cost of probate.
- Leave clear instructions. The more ambiguous your will is, the more likely it will be the subject of a protracted legal dispute. And this will only eat into your estate through legal fees.
- Set up a joint tenancy with the right of survivorship. Making your heirs co-owners of your properties, businesses and annuities allows you to bypass probate and, thus, avoid any associated costs.
Taking proactive steps
The probate process can eat up a chunk of your estate and reduce the amount of wealth available to pass down to your beneficiaries. Understanding how Colorado’s probate process works can help eliminate unnecessary costs.