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Families with large estates could face probate delays, state-level death taxes and periods when no one has legal authority to make key financial decisions. A simple will cannot keep assets out of probate, plan for incapacity or manage how the money gets distributed. If you have $2 million, here’s an example of when you may need a more complete estate plan.
What a Simple Will Does and Does Not Do
A simple will can name who inherits property, choose an executor and name a guardian for minor children. Those instructions take effect only after death through probate, which validates the document, pays debts and distributes the remaining estate. Depending on your residence, this process can take months and add legal fees and court costs.
Incapacity could leave you with another potential gap, since this type of will has no power to pay your bills, sell real estate or make medical decisions while you’re alive. Without the necessary documentation, your family may need a judge to appoint a guardian or conservator.
Additionally, if you want to set conditions on how heirs spend money, a simple will doesn’t structure the way it gets distributed. Instead, heirs typically receive their full share at once, with little protection from poor decisions or creditors. Some assets also fall outside the will entirely, since retirement accounts and life insurance generally go to beneficiaries named on them.
The table shows which needs a basic will handles and what can fill each gap:
| Planning Need | Covered by a Simple Will? | What Can Fill the Gap |
|---|---|---|
| Naming who inherits your property | Yes | Review the will after a marriage, divorce or new child |
| Choosing an executor | Yes | Name a backup executor in case your first choice can’t serve |
| Naming a guardian for minor children | Yes | Name a backup guardian and use a trust to manage the child’s inheritance |
| Avoiding probate | No | Revocable living trust, transfer-on-death or payable-on-death designations |
| Planning for incapacity | No | Durable power of attorney and health care directive |
| Controlling when heirs receive money | Limited | A trust with distribution terms |
| Retirement accounts and life insurance | Generally no, since valid beneficiary designations typically take priority | Updated beneficiary designations |
| Real estate in another state | May require a separate court process in that state | Revocable living trust |
For a household with $2 million spread across real estate, investments and savings, every gap can mean extra cost, delay or uncertainty for heirs. A financial advisor could help you identify where a simple will falls short and which options may help you fill those gaps.
How Much a Simple Will Could Cost in Probate Fees
Assets passing under a simple will generally require probate before they can be distributed to heirs. Depending on the state and the estate’s value, the legal and administrative fees can be substantial. A revocable living trust may be worth the upfront expense if it allows the estate to avoid those costs.
To show how much probate can cost, here’s an example from California, where standard executor and attorney fees are generally set as percentages of the gross probate estate. 1 For a $2 million estate subject to the process, each fee can be paid under the following schedule:
| Portion of the Estate | Rate | Combined Executor and Attorney Fees |
|---|---|---|
| First $100,000 | 4% | $8,000 ($100,000 × 4% × 2) |
| Next $100,000 | 3% | $6,000 ($100,000 × 3% × 2) |
| Next $800,000 | 2% | $32,000 ($800,000 × 2% × 2) |
| Next $1,000,000 | 1% | $20,000 ($1,000,000 × 1% × 2) |
| Total | $66,000 |
Under this schedule, probate could include $66,000 in standard executor and attorney fees alone, if both receive the full statutory fees for ordinary services. That’s $33,000 for each, which is 3.3% of the estate’s value ($66,000 ÷ $2,000,000). Assuming no debts, taxes or other expenses, heirs would receive $1,934,000 before additional court costs.
A family member serving as executor can waive compensation, though attorney fees may still apply if you retain one. A revocable living trust could lower probate expenses on the assets it holds, but setting one up and administering it adds costs. Savings also depend on location, since California’s percentage-based schedule is unusual and many other states can charge far less.
When a Simple Will Can Be Enough
A $2 million estate can still avoid probate if its assets are set up to pass on their own. If you name beneficiaries on your IRA, 401(k) and brokerage account, use a transfer-on-death deed for your home (not every state allows one) plus a payable-on-death designation on your bank account, your heirs could inherit those assets without court involvement. Your will would then cover only items such as a car and personal belongings.
Owning property in another state, leaving money to a minor or remarrying would change that and may make a trust worth considering. You should still have a durable power of attorney and a health care directive. An estate planning attorney can confirm that every beneficiary form and deed is current.
A financial advisor can help you compare a simple will with other estate planning options.
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Article Sources
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- California Legislative Information. “California Probate Code Sections 10800 and 10810.” https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10800.&lawCode=PROB.