More on my series on stuff never mentioned in political campaigns but that are insidiously destroying people's hard work and family legacy (nothing exiting in the energy markets at the moment):
While probate does not evoke the passions of divorce with all of the political angst associated with the latter, a little preparation goes a LONG way. Only 50% of marriages end in divorce... 100% of lives will end in death.
I am NOT a lawyer, and this is not legal advice. If you are your average Middle Class Millionaire ("MCM") you probably don't need a great deal of expensive and intimidating estate planning. You need to educate yourself on the process, you need a Revocable Trust, sometimes call a "Living Trust", (you can get the forms at many Legal Forms web sites for about $20) and then you need to move your assets INTO the trust (just go to your bank or broker, they know what to do and its free). Upon your demise, your assets will go to your beneficiaries WITHOUT going through the very expensive and time consuming Probate process.
The statutory probate fees can be VERY excessive (as a percentage of your estate) if you employ leverage (debt). You see, the statutory percentage is of the GROSS estate, not the net. For example, let' say you have $3 million assets and $2 million of debt. The probate fee might be 3% to 7 % of the the $3 million gross, not $1 million net. So let's go with the 7%. Probate fees of $210,000 for net assets distributable to your heirs of $1 million is a 21% death tax. Is that what you worked so hard for? Don't let this happen.
If you are over 60 years old, I would certainly recommend that SOME of your assets be held in some sort of FIXED (not variable) annuity. (BTW, I am not a paid shill for the insurance industry a la Ben Stein and his association with the Variable Industry. I don't even have a valid insurance license at the moment as I have let it lapse.) Wall Street spends a great deal of time and money trying to disparage these insurance products in the press. I want to share with you my own experience. I have put millions of client's $$ in these over the years, and I have NEVER heard one of them say that they wish that the annuity check they receive every month like clock work would stop coming and they would have been better off in the stock market. EVER. Especially as they get older. The last thing you need when you are getting on in years is the opportunity to screw up badly. Opening the envelope for the monthly check is not a decision that ends in tears. When you are 60, you are healthy and thinking clearly - this is not always the case 20 years hence, but there will always be some sc*m bag willing sell to an 80 year old person something they really don't need.
The other cool thing about annuities is that they bypass the probate process entirely (provided that it is not a "Life Only" annuity) and upon your death the insurance company will distribute directly to your stated beneficiaries.
If you have a complicated estate, by all means seek out an attorney. I am fortunate in that I have a buddy of mine that I barter services with. I handle his financial stuff and he helps me with my legal stuff. But for your average MCM, I think a visit to Barnes & Noble or the local public library and a couple hours of reading and researching on the Web should be sufficient for you to feel comfortable going to a site like Legal Zoom and buying the Living Trust form and doing it yourself. I actually bought one of these and brought it to my attorney friend who said "nothing wrong with this", and we doctored it from there.
These are REAL issues facing regular folks that most just don't think about and you are never going to hear about in a political campaign. The entrenched special interests have too much at stake for these things to see the light of day, and the folks that usually raise the alarm on government abuse issues just aren't that interested in divorce and probate reform, but these are the issues most likely to take a bite out of your behind. So you are on your own.
Greg