The myth of estate planning is that it’s for the wealthy. In Pennsylvania, if your estate is valued over approximately $25,000, it typically goes through probate. Probate can cost your estate 5-12% or more. The end result is a depleted legacy to your loved ones.
A quick way to get an approximate cost of probate to your estate is to take the value of your home, money, automobiles, recreational vehicles, collectables, furnishings, life insurance death benefits, and other estate valuables, and multiply it times 5-12%. (Life Insurance may not be included in the estate value if set up correctly)
Whatever end number you come to is the approximation of how much your loved ones or heirs can lose due to the probate process. Large estates may experience a smaller percentage loss. Average attorney fees for probate can run between 5-7%, which could bring the total amount of loss up to 19% or more. We suggest an attorney who charges by the hour in most cases.
IRAs, 401(k)s, 403(b)s, and other qualified retirement accounts can also be hit with Federal and State Income taxes at the heir’s tax rate after the account is added to their income.