Even in death, it’s hard to escape certain expenses. For example, there are final bills and debts, funeral and burial costs, and maybe even taxes – and then there’s the cost of settling your estate. Believe it or not, there are steps you can take now that will help reduce the legal fees that come with finalizing your affairs after you’re gone. Here are three tips:
1. Attack Debt: We all know that debt can plague us during our lifetimes. But, it can also make things more complicated – not to mention expensive – for your loved ones after you’ve passed away. Of course, the best way to avoid the hassles associated with debt is to pay it all off as soon as possible, and pass away not owing a dime. For many people, though, this just isn’t realistic. So, what’s the next best thing? Have a plan for reducing debt as much as possible now, but also make a plan to simplify the process for dealing with your remaining debt when you pass away. For example, work with your attorney to ensure that there’s enough liquidity in your estate to take care of your final bills.
2. Plan Carefully: The most important thing you can do to reduce the costs associated with settling your estate is to establish an estate plan, and make sure that it’s effective. Without a plan, your family is likely to spend extra money on probate, taxes, and even litigation over your estate.
Well-drafted and properly signed documents are the first step in making an effective plan, but you also need to make sure your estate plan is kept up-to-date. Establishing a relationship with an experienced estate planning attorney can help make sure you have a plan that works when the time comes.
3. Consider a Living Trust: A well-drafted and properly funded living trust can help avoid probate, which is often a costly process. And, properly worded, it can even minimize estate taxes. Whether or not this is the appropriate option for you depends on a number of factors, but often, the cost of establishing and maintaining a living trust is far outweighed by the savings provided to your loved ones after your death.