Well, there are a couple of reasons to create an estate plan. The first is so that you have a roadmap as to what’s going to occur in the event of an unforeseen or unusual death of let’s say a spouse. If you don’t have a plan, there is so much confuse and so much to do, and so much to learn and so much to transfer that it becomes overwhelming, particularly when the surviving spouse is in a state of grief. So the first is just to create a plan, know what’s going to happen, know what you’re going to do, know what you need to do. The second is that in terms of creating estate plans, the first and foremost reason for creating one is to avoid the cost of probate. People often ask me what the cost of probate is. And the cost of probate is really the cost of transferring an asset in the, a decedent name to the beneficiaries.

And that’s really the, what the probate process is. It’s a transfer of title of assets from the decedent to the beneficiaries, but there’s a fee that’s associated with that and that’s called a probate fee. So in order to go back and obtain the change or the transfer of, of title, you have to go through probate court, which means you have to go into court in order to be able to obtain the transfer of the title to those assets. For example, if you were to go back and if a couple had a home and both of them were to pass and the home was to pass to the children as beneficiaries under, um, under probate, let’s say under will, then there’s a way to calculate what the fees of the probate are. And the fees of probate are predicated based on the overall value of the estate itself.

The estate is comprised of the assets of the decedent and the assets that need to be transferred to beneficiaries. So let’s take a simple example. If you have a, a home let’s say in San Diego and the median price of that home is say $640,000, which I believe is the current medium value of homes in the San Diego area. Then probate would be calculated as follows. There would be a 4%, uh, probate fee on the first a hundred thousand dollars or $4,000. Then there’s a 3% fee on the next a hundred thousand dollars again of the $640,000 asset, which would equal $3,000. And then there’s 2% on the remaining assets from $200,001 up to a million. So just by having a median priced home in San Diego county and attempting to transfer assets to the beneficiaries could cost you in probate fees alone, $32,000. And that’s not including additional fees such as in order to sell a home, you have to have an appraisal. You have to have perhaps fix up costs. There are tax turns to be completed. There are a number of fees that would be associated that would be concurrent with finalizing probate that would have to be paid the cost of going back and creating a trust is far less costly. And in terms of actual dollars than just a simple transfer of a home in San Diego county, we, most of the trust that we do in our office are far below that $32,000 figure and generally run from between $2,500 to $4,500.