Strategies for Minimizing Probate Costs in High-Value Estates

Executive summary

• Probate can be a costly process for high-value estates, so it’s a good idea to take steps to reduce costs where possible.
• Some strategies for minimizing costs in high-value estates include establishing a living trust, utilizing payable-on-death accounts, and designating joint owners or beneficiaries for property or accounts.
• It’s important to overcome key challenges during probate that include facing probate disputes and navigating complex legal responsibilities. 
• An experienced probate and estate administration attorney may be able to help you identify options for minimizing probate costs.

Introduction 

Probate can be a helpful process for distributing the estate assets of a deceased individual to the rightful heirs and beneficiaries. However, it can also be a costly and time-consuming one, especially with high-value estates of high-net-worth individuals—legal fees, filing fees, and other expenses can all add up quickly. Taking steps to reduce the necessity of probate and offload your ownership of probate assets will go a long way toward minimizing probate costs. 

Building a strong estate plan is key to minimizing costs and inconveniences before you must reach the probate process at all. Once you enter probate, a skilled probate litigation attorney can help to identify whether your estate plan has any holes in it and provide guidance to navigate hurdles with as little difficulty as possible. Understanding your options and the necessary steps you should take is key to minimizing probate costs in high-value estates. 

How To Minimize Probate Costs 

Between legal and filing fees, probate can be a costly process for transferring assets from an estate to its beneficiaries. To minimize these probate costs, consider the following steps throughout probate and the preceding estate planning process. 

Strategy #1: Establishing a Living Trust

A living trust is a valuable tool for avoiding probate and the potentially high costs associated with it entirely. A living trust allows you to transfer the ownership of estate property from yourself to a trustee who will be responsible for distributing assets to their rightful beneficiaries. A living trust can be used to hold several types of assets, including financial accounts, real estate, personal property, and more.

A grantor may choose to create either a revocable trust, which they can change at any point before their death, or an irrevocable trust, which can only be changed with explicit permission from all beneficiaries and interested parties or by court order.

However, any assets not included in the trust at the time of death are still subject to probate. You can still simplify probate by using a pour-over will to guide the transfer of assets into the trust upon your death. 

To maximize the effectiveness of your trust, it’s important that you take several precautions to avoid common mistakes: 

• Choose a reliable person to act as the trustee
• Consult with an estate planning attorney about the different types of revocable and irrevocable trusts to choose the best option
• Ensure that the trust is properly funded and regularly updated
• Verify that all your desired assets are accounted for in the trust so you can avoid having them pass through probate

Strategy #2: Gifting Assets During Your Lifetime

By gifting assets during your lifetime, you can reduce the size of your estate and the number of assets that will be required to pass through probate. Gifting allows you to pass valuable assets to intended beneficiaries, heirs, and family members during your lifetime so that you have fewer assets to distribute when it comes time for probate. 

The estate and gift exemption tax in the United States is $19,000 per person annually—under this amount, you are not obligated to report the gifts to the IRS. The overall lifetime exemption is $13.61 million in 2025, although this number may drop to $7 million in 2026. If you gift under these amounts, you can avoid having to pay federal gift taxes on the assets transferred. 

Assets that can be gifted include: 

• Real estate
• Valuable property like vehicles, jewelry, or artwork
• Stock shares
• Cash

It is important to consult with an estate planning attorney and a tax attorney to determine whether your goals will be best served by in-life gifts or by transfers after death. Some tax benefits may be better after your passing.

Strategy #3: Utilizing Joint Ownership

Joint ownership of assets is a helpful approach for allowing property to be transferred directly to beneficiaries without probate. Under joint ownership, the surviving owner maintains full control over the assets without the need for probate to distribute them.

Joint ownership is a common tool for the following assets: 

• Bank accounts
• Real estate property
• Vehicles like cars, private jets, or yachts

Using joint ownership as a tool is a great way to avoid probate and still ensure that surviving heirs receive ownership of the property you intend. This arrangement is ideal when you can have a strong relationship with a beneficiary and can trust them to make responsible decisions around these assets during shared ownership.

Strategy #4: Designating Beneficiaries & Using Transfer-on-Death (TOD) and Payable-on-Death (POD) Accounts

Having a beneficiary designation for certain accounts and policies can prevent the need for said assets to pass through probate. For example, some assets like bank accounts, investment accounts, and life insurance policies can avoid probate and pass directly to the beneficiary if there is one designated on the account upon the owner’s death.

It’s important to ensure that you take the extra steps needed to specifically designate a beneficiary on an account with your bank, credit union, or brokerage firm. If you have any questions about how to do so, you should contact your institution or go in person to fill out the necessary forms.

If you take advantage of this option, it’s important to review and update the specified beneficiaries regularly so that the recipient of assets remains aligned with the head of the estate’s wishes. Life events like marriage, divorce, or the birth of a child can all affect beneficiary designations and alter the estate’s intentions.

Transfer on death and payable on death bank accounts follow a similar process to jointly owned assets or designated beneficiaries. These accounts allow the owner to designate a specific party to assume ownership of the assets upon their death. Instead of having to pass through probate to be distributed to heirs identified in a will, these types of accounts are easily claimed by the beneficiary as long as they go into the institution servicing the account with the death certificate and a valid form of identification.

Strategy #5: Leveraging Family Limited Partnerships (FLPs)

A family limited partnership is an entity held by multiple family members, designed to hold accounts, property, and assets owned by the collective group—similar to a structured set-up like a limited liability company, for example, where everyone has a stake in the assets. 

With an FLP, the assets avoid probate because all property is considered to be the property of the partnership entity, not the deceased. Instead of adding to the costs and length of probate, the other interested parties in the FLP can decide how to manage and distribute assets. 

Strategy #6: Planning for Charitable Giving Through a Charitable Remainder Trust (CRT)

Charitable giving is another way to reduce the size of an estate and simplify probate for reduced costs. A charitable remainder trust is a tax-exempt type of irrevocable trust created with a contribution from the trust grantor or creator where the assets are invested during the trust term and the remaining assets at the end of the term are distributed to a qualified section 501(c)3 charity. The grantor typically decides which organization will benefit from the contributions and how frequently a portion of their income will be contributed to the trust. 

This form of trust reduces the size of the estate and the value of assets that may need to pass through probate, allowing the contributions to go directly to the beneficiary. A CRT also allows for the grantor to benefit from capital gains, gift, and estate tax deductions by contributing to charity and reducing the amount of taxable assets tied to the estate. It’s important to note that because this trust is irrevocable, the grantor will have no control over or access to the assets placed in the trust.

The most common types of charitable remainder trusts include a charitable remainder annuity trust (CRAT) and a charitable remainder unitrust (CRUT). A CRAT involves distributing a fixed annuity each year to noncharitable beneficiaries and does not allow for additional contributions, while a CRUT distributes a fixed percentage based on the value of trust assets, which are revalued yearly, and does allow for additional contributions.

Common Mistakes To Avoid When Planning for Probate Cost Reduction

Estate planning is a difficult art to master—if you’re not careful, you may find yourself experiencing a few pitfalls that could actually lead to a lengthier and more costly probate. Avoiding some of the most common estate planning mistakes will allow you to reduce the costs necessary during probate. 

Some common mistakes include: 

• Having inconsistent information – Inconsistent or contradictory estate planning documents or beneficiary designations can complicate and extend probate, so you should consult estate planning experts to ensure your estate plans are consistent throughout the document you want to be controlling and each of its amendments.
• Going into probate alone – Navigating probate without the support of an attorney can lead to costly errors or potential mismanagement of the estate and its assets.
• Falling into extensive disputes – Long inheritance disputes can drag out the probate process and lead to even more costly probate litigation, so utilize mediation or arbitration strategies where possible.
• Overlooking state laws – Probate exemptions and requirements depend specifically on state laws, so it’s important you understand any state probate requirements that could affect cost reduction potential.

Ultimately, the best way to minimize probate costs is to develop a formidable and thoughtful estate plan that can reduce the need for probate at all. During the estate planning process, you should consult an estate planning attorney, a financial advisor, tax experts, and any other relevant professionals so you can understand all of your potential options and how you can establish the best plan for your estate. 

Once you have your estate plan in place, a skilled probate and estate administration attorney can be a helpful resource for understanding how an estate plan will take shape after a person passes away and addressing how you navigate probate procedures.

If you’ve already fallen into any of these pitfalls with an irrevocable estate plan, or you’re a personal representative (such as a trustee, executor, or administrator) for an estate facing the issues mentioned, consult a probate litigation attorney who can offer you assistance through several areas of the process. An experienced litigation attorney can offer support in navigating mediation to avoid costly litigation, and provide guidance on how to move the estate through probate while following all important steps to prevent unnecessary fees or penalties. 

Protect Your Estate and Its Assets

From placing your assets into a living trust to establishing joint ownership for certain properties, strategic estate planning plays a valuable role in minimizing probate costs for high-value estates. Of course, your options are limited once the probate process begins and it’s past time for estate planning. A skilled probate and estate administration attorney can help guide you through probate so you can avoid unnecessary costs before it’s too late to fix the pitfalls that can arise. 

Our attorneys at RMO Lawyers will serve as a valuable resource for beneficiaries, heirs, trustees, and other interested parties involved in an estate. With decades of experience in probate and estate administration, we will help you navigate probate to protect the interests of your estate wherever possible. 

Schedule a consultation with our team at RMO Lawyers to discuss your estate plan and any snags you might face during probate.