Why
a Living Trusts : Who Receives Probate Fees
Lawyers & Executors Receive The Probate Fees, Not The Government
Probate fees are not a tax, nor do they go to the government, or the
court. That’s right -- probate fees are not a tax and have nothing
to do with taxes. Probate fees are split between the attorney and
the executor handling the estate, and of course must be paid in
cash (many times before anyone else receives anything). It is not
unheard of for probate fees to consume a majority of, or even the
entire amount of an estate. (How this happens will be discussed
in the next section under “Lawyer Math”.)
How Attorneys Often Are Able to Double Their Fees:
If the attorney both probates the estate and acts as executor, he
or she will of course be paid all the probate fees – and it is an
undeniable fact that many Wills have named the authoring attorney
as the executor. Draw your own conclusions.
Law Practices Have Been Valued by How Many Wills are Stored in Their
Files
Many times the original Wills are also kept in the authoring attorney’s
safe! Is the attorney doing this just to be a nice person? In search
of an answer, contemplate the high likelihood that the attorney who
“safe keeps” the Will is often the attorney who probates the estate.
Consider that law practices have been valued by how many Wills are
stored in their files and that such Wills have been referred to as
the “lawyers retirement plan”! An excerpt out of a Wall Street Journal
Article says: “Many lawyers would rather write a Will for $60, then
make a bundle when the Will is probated”. Again, draw your own conclusions.
I shall never forget a story told by our Estate Planning Professor
in law school. He established a Living Trust for a wealthy elderly
lady who previously had a Will drawn up by another attorney. Shortly
thereafter, he received quite a nasty phone call from the attorney
who drew up the Will saying he had been waiting years for the lady
to “kick-off” so he could collect the probate fees.
Given the money lawyers make from probate, I will leave it up to
you to conclude whether or not there are attorneys who would purposely
steer clients clear of a trust, or tell them they did not really need
a trust, or actually provide them misinformation.
In interviewing countless clients I ask them to recall what explanation
some lawyer gave when advising them that “they do not really need
a trust”? The client usually sits there with a blank look trying to
recall any real explanation and consistently the answer is that “well,
the lawyer was not really very clear on that!”
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