Avoid Estate Planning Tax?
Many think of trust as a vehicle to avoid estate planning tax. Well, does a Revocable Trust Save Estate Taxes? Despite the fact that revocable trusts are often credited for saving estate taxes, but it is not entirely accurate. Although the trust can be drafted to minimize the effect of estate taxes, but the effect is not that of a trust itself. What trust can do,will can do too.
Avoid Elective Shares?
Others think trust can provide protection from the Elective Share. Again, it is not absolute accurate. Florida law provides that a surviving spouse is entitled to a minimum portion of the decedent’s estate, called elective share. This elective share is equal to 30% of the estate, including certain assets passing outside of probate. Generally, assets held in a revocable trust will be subject to the elective share. There are some exceptions to the elective share, and the right to receive an elective share can be waived by the spouse.
Avoid Probate Process
It is common belief that revocable trust avoid probate. The first question you should ask is why do we need to avoid probate. Probate is a court-supervised process for identifying and gathering the assets of a deceased person (decedent), paying the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries.There are two types of probate administration under Florida law: formal administration and summary administration. Probate can become rather expensive and the main cost in a Florida probate is usually the fees of lawyers.And since, for most probate cases, Florida rules require a probate attorney, attorney fees are usually an inescapable part of the probate process.
According to the law in Florida, when the compensable value of the estate exceeds $40,000 and is not eligible for summary administration, a formal administration of an estate must take place.
In comparison with the compensable value of an estate, the following examples are considered probably reasonable fees:
- For estates of $40,000 or less: $1,500
- For estates between $40,000 and $70,000: $2,250
- For estates between $70,000 and $100,000: $3,000
- For estates between $100,000 and $900,000: 3% of the estate’s value
- For estates between $1 million and $3 million: 2.5%
- For estates between $3 million and $5 million: 2%
- For estates between $5 million and $10 million: 1.5%
- For estates of $10 million and above: 1%