Probate – Potentially expensive, time consuming and totally public. Average costs are approximately 5% of the GROSS estate with a value that exceeds $3,000 to $100,000 (depending on the state) in personal property and real property. If you own property in another state or country, probate will occur in each of those states or countries. With a will or no will, probate will occur.
Death Taxes – Heirs face hefty tax bills of 31% to 47% of a net estate's value over $2 million (2006). The bill is due in 9 months, in cash. (Caution: The estate tax exemption will drop back to $1million in 2011 when the tax reconciliation act sunsets).
Other Taxes –You may not know about but which can greatly impact your estate.
Business continuation concerns – Disruption of the business, including a possible forced sale or liquidation due to the death or disability of a key business owner or employee.
Concerns of minor or disabled children and other heirs.
Guardianship in the event of the parent's death.
Common errors which leave the rights of children unprotected; for example, accidentally disinheriting stepchildren, children from a previous marriage or your children if you or your spouse dies and the surviving spouse remarries.
Conservatorship - (also known as guardianship in some states). A legal proceeding in which the courts appoint someone to act as conservator and be responsible for an individual who is no longer deemed to be competent. Legal costs, annual accountings to the court, incompetence of the disabled adult are public record.
Pensions - with incorrect planning, large private pensions can face income taxes and estate taxes.