Let’s be honest here, no one wants to think about what probate will mean. The reality is that we will not live forever, and neither will our loved ones. If you are unfamiliar with probate, it is the legal process that takes place after someone dies. If you are forced to deal with the probate process, you might find yourself spending money and getting more involved with everything than you planned. While you might expect to receive money, the opposite can, in fact, be true. In some cases, the probate process can be expensive and time-consuming. In this post, we will discuss 4 costs to expect during the probate process in Houston so that you will be able to best prepare yourself!
1. Owed Debts To Be Paid In Probate
When someone passes away, the executor of their estate will need to find and pay all of the deceased’s outstanding debts. In most states, the executor of the estate is required to publish a notice of death in the local newspaper, alerting any creditors not known to the courts or to the executor. These creditors will have a limited amount of time to file a claim against the estate for amounts they are owed. It is only after all debts have been paid that the executor of the estate is free to distribute assets left behind by the departed.
2. Probate Associated Fees
If an inherited house has to go through the probate courts, there are going to be some costs. Court fees are dictated by state law and can range anywhere from a few hundred dollars to over a thousand dollars. It depends a great deal of the complexity of the estate and how many different forms must be filed. More complicated estates require more forms.
Executor fees are also dictated by state law, although decedents can specify in their wills just how much their nominated executor—also sometimes referred to as the personal representative—should be paid. State law will apply when a will is silent regarding this provision.
The cost of a probate attorney can run up to 5% of an estate’s value. While you may not always need an attorney to represent you, in many cases, it makes the process go much more smoothly. When you hire an attorney, you can be assured that all debts, creditors, and beneficiaries will be properly taken care of.
Miscellaneous fees can range from the cost of postage to insuring and storing personal property, shipping personal property, and more. And this doesn’t include any estate and income taxes that might be due and payable during the course of the probate administration. Taxes can further deplete an estate.
Even after death, you can’t avoid the taxman. The executor of the estate must file any pay income taxes for the year of the decedent’s death. They must also check to see if any estate taxes need to be paid. If so, these taxes are typically due within nine months of the deceased’s passing. The property taxes for any real estate owned will need to be kept up to date in order to avoid foreclosure of the property.
In order to avoid probate, an individual can either set up a trust, own property in joint tenancy with the right of survivorship or set up beneficiaries when creating the assets. This is particularly true with stocks and bank accounts. By avoiding probate in Houston, you will be able to avoid a number of the costs people often face.
When a property is in probate, it can be tied up for months. In addition to the costs above, if a property is in question, the executor of the estate will need to pay the taxes, insurance, and mortgage on the property to keep it from going into foreclosure.
The probate process can be costly and time-consuming. It isn’t something anyone wants to deal with, however, most people will have to deal with it at one point or another. Should you encounter probate in the future, we hope that this article is able to help in some way. Please reach out to us if you have any questions about probate.
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