What Does Probate cost?

In the normal course of business I often come across real estate agents and estate representatives with the question: “how much will probate cost?”.  I thought it would be appropriate to shed some light on this subject in case you were not sure how it works. 

Court Fees
First and foremost, there are court fees that must be paid for the probate.  The fees run approximately $400 to file the probate petition and approximately another $400 to file the petition for final distribution of the estate assets.  There are also often miscellaneous fees for things like publication of notices, probate referee fees (typically .1 % of the assets appraised), and fees for certified copies of documents.

Personal Representative/Attorney Fees
California Probate Code § 10810 sets the maximum fees that attorneys and personal representatives can charge for a probate.  The personal representative is the executor or administrator.   The personal representative may or may not choose to charge fees depending on the circumstance.  One consideration for the personal representative is if they are also a beneficiary.  If so, they have to decide whether it is better to receive fees (potentially taxable income) and a reduced estate for all the beneficiaries as opposed to just receiving their inheritance (potentially non-taxable).  The decision should be made with the consultation of their legal advisor and certified tax planner or CPA, but they will also probably consider the amounts they will receive if fees are taken out of the estate before splitting the inheritance with the other beneficiaries, as opposed to just splitting the whole pie with the beneficiaries.  The results can be different in each case.

Typically, personal representatives and attorneys can charge 4% of the first $100,000 of the estate, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000, and ½ % of the next $15,000,000. For estates larger than $25,000,000, the court will determine the fee for the amount that is greater than $25,000,000. (Estates larger than $25,000,000 are a very good problem to have! ?)
In special circumstances or complicated cases, higher fees can be approved by the courts, but a chart of the basic charges is below: 

Value of Estate/  Compensation to Attorney/Personal Representative
$100,000           $4,000
$200,000           $7,000
$300,000           $9,000
$400,000           $11,000
$500,000           $13,000
$600,000           $15,000
$700,000           $17,000
$800,000           $19,000
$900,000           $21,000
$1,000,000        $23,000
$1,500,000        $28,000
$2,000,000        $33,000
$3,000,000        $43,000
$4,000,000        $53,000
$5,000,000        $63,000
$6,000,000        $73,000
$7,000,000        $83,000
$8,000,000        $93,000
$9,000,000        $103,000
$10,000,000      $113,000
$15,000,000      $138,000
$20,000,000      $163,000

Remember, these are the amounts that both the attorney AND the personal representatives can charge.  So the actual payments could be double what you see in the charts (if both the attorney and the PR are charging these amounts).  Also note that these charges can “technically” only be charged once the court has ordered the fees paid from the estate which usually happens at the end of the process.

Value of the Estate
Estates are appraised by probate referees, who are appointed by the State Controller to determine the fair market value of the asset.  The value of the asset (and therefore the amount for calculating the attorney’s or PR’s fees) does not take into consideration the amount of debts or liens on the property.

For example:
A home is worth $500,000 but has a loan balance of $480,000.  There is, therefore, $20,000 of equity.  However, the amount used for calculating the attorney’s or PR’s fees would be $500,000.

Like anything, there can be special circumstances and considerations so it is always best to consult legal advice and/or a CPA or tax advisor. 

“Over the course of the last 10 years Kevin has helped out on too many files to even keep count of. When issues have arose regarding recording, legal uses, and special needs, Kevin has put his knowledge and hard work into action, to complete deals in a timely manner. Kevin has been our preferred title rep for all these years due to philosophy of business and his willingness to get deals done.”
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First Security Lending


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Kevin Sayles
Your Probate Specialist
VP, Advantage Title
213-364-3810
www.ProbateTitle.com
Informational purposes only.  Consult your own tax, estate planning and legal professional for advice.