• If your estate is subject to probate, your estate will have to pay both statutory fees to attorneys (set by laws of the state where the decedent resided, usually 4 percent to 7 percent of the estate value), and extraordinary fees (charged by attorneys or specialists for extra services and approved by the probate court).  There are also court costs that can run another 1%-2%.

• Probate includes the process of closing the estate. It can lead to substantial delays (sometimes months or years) as various family and business issues are resolved.  This can lead to serious additional costs and losses, especially if a business is left to flounder for lack of control and authority.

• Probate also makes the estate open to public record and review, since all creditors of the estate must be given complete information about the estate’s financial status.

Your estate will also be subject to:

• Estate taxes: It is critical to remember that some or all of these taxes can be avoided by using the vehicles of credits, deductions, charitable bequests, and the types of trusts noted in this chapter and elsewhere.

• State inheritance taxes: This definitely requires legal and tax counsel since the various states consider these taxes differently, including the use of matching credits to the federal taxation system.  In some cases there is no exemption for transfer to the surviving spouse, and beneficiaries may also be taxed.  Check with your local advisor on this issue.

• Generation Skipping Transfer tax (GSTT): If it applies, it is a whopping flat 55 percent tax, in addition to the other income and estate taxes on any transfers made to certain named beneficiaries.  These can include relatives, such as grandchildren, or other lineal heirs.  Great care must be exercised with planning for this tax, since it is so onerous.