Will Planning for Estates Worth Less than $50,000.00

If your estate is worth less than $50,000.00, then there are some considerations to make when Estate Planning. Firstly, it is strongly recommended that you get a lawyer to draft your will. The law changed effective January 1, 2020, allowing any Estate valued at under $50,000.00 to potentially avoid probate, as long as a Will is properly drafted and accepted by the Bank as appropriate.

The key consideration is whether a bank will accept the will as properly drafted. A bank is under no obligation to accept a Will, and they may require you to “Probate” the will, if they are concerned that the will may be challenged or set aside.

Banks will almost always deny a “homemade” will or a one completed with a will-kit. This is because there are too many potential issues that can arise with these types of wills. They will therefore require almost all “homemade” wills, “holographic” wills and Will kits to be probated. This will cost the Estate legal fees around $5,000.00 to potentially more.

The banks will often accept a will that is drafted by a lawyer, on the condition that the Estate Trustee sign an Indemnity Agreement to pay the bank back if any issue arises.

This means that a Will drafted by a lawyer could save the estate the cost of “probating” the Will. In other words, paying the smaller cost of drafting a Will can save the Estate the $5,000.00 or more in legal fees to “Probate” the will.

This is why we often say that it is more important for Estates valued at less than $50,000.00 to get a professional Will drafted with a Lawyer than Estates worth over $50,000.00.