Probate is a legal process required by the courts that is intended to supervise the proper distribution of the estate of a person who dies. Essentially, the probate process is intended to determine basic things, such as:
- Verify the validity of the deceased person’s will;
- Identify and inventory the deceased person’s property;
- Have the property appraised and valued;
- Pay the deceased person’s remaining debts and taxes; and
- Distribute the deceased person’s property to the appropriate people, entities, and/or charities
If the person dies without a will, then there are a set of different procedures that must be followed.
Usually the executor of the will initiates the proceedings in probate court. When a person dies, the will is presented to the court, and the court will make the determination regarding the validity of the will. If there is no executor, or if there is no will, then the court will select an administrator to act as the executor.
Additionally, if a person dies without a will, the court must follow certain specific procedures in order to distribute the property of the estate according to the state’s rules on intestate succession. The probate court also supervises the payment of estate taxes and debts, and resolves any conflicts between the heirs of the estate.
The cost of probate can include various fees, including:
- Court fees;
- Attorney fees;
- Accounting and appraisal fees; and
- Fees paid to the executor.
How expensive the probate process can be largely relates to the organization of the estate. If you have to bring in accountants and attorneys to search for and evaluate the deceased person’s assets, that’s a lot of manpower, and the fees can add up quickly. If the heirs of the estate contest the will and fight regarding the division of those assets, those costs can also increase the overall cost of the process.
Fees paid to executors and probate attorneys are subject to state law, so these fees can vary depending on where you are. Depending on the amount of work that goes into administering the estate, these fees are often limited to about two to four percent of the estate value.
For example, California allows executor fees to be calculated as a percentage of the estate’s value. The executor may charge 4% of the first $100,000 of the estate, but the percentage value goes down as the estate value goes up. For a $1 million estate, the executor’s fee is $23,000.
Texas, however, allows executors a commission of five percent on transactions on behalf of the estate (with a lot of exceptions). Sums the estate receives in cash and sums they pay out on behalf of the estate can count towards this commission. Exceptions to this rule include funds on deposit in a financial institution, life insurance policies, certificates of deposit, and distributions to beneficiaries.
Additional Probate Costs
In addition to the executor fees and attorney fees, there are also court costs associated with probate court. These court costs can also vary from state to state, as well as with the type of estate and the paperwork that is required to be filed with the court.
Additionally, in some states, the value of the estate’s assets may determine the filing fees. In California, the cost to file for probate is $320, no matter the value of the estate. However, in Massachusetts, the fee to formally probate a will is $375, and additional filings in the course of the probate procedure (depending on what is necessary for the circumstances of the individual case) have filing fees that range from $75 to $375.
Because each state has its own individual rules when it comes to probate, the costs can vary greatly from state to state. Even from case to case, the costs can vary depending on certain circumstances. Circumstances that may affect the overall costs of the case include the size of the estate and the value of the assets, disputes among heirs, the existence of a valid will or trust (or even the lack thereof), and the complexity of the estate.
The overall cost of probate can be in the ballpark of 2%-7% of the value of the estate, but could be more depending on the facts and circumstances of the individual case. New York’s probate cost can range within that ballpark figure, but can be more depending on certain details. Depending on the value of the estate, the executor fees and attorney fees in New York can be between 2.5% to 5% of the value of the estate, and court costs can range from $215 to over $1200.
North Carolina’s probate court fees are fairly modest–the fee is determined by the value of the estate. For North Carolina estates valued over $10,000, the fee is $40.00, plus $4.00 for each $1,000 of personal property held by the estate. These fees are also capped at $6,000 (even if the value of the estate is over $1 million).
Florida sets out a reasonable attorney fee schedule that is linked to the estate’s value, and allows for attorney fees ranging from $1500 to $165,000 (with additional percentage taken off).
An experienced, local estate lawyer can be extremely helpful when dealing with probate issues, especially since matters can escalate in complexity very quickly and you want to make sure you have the best information when you move forward with the estate.
A qualified lawyer can help you navigate your own state’s process, protect your interests, file the appropriate paperwork with the probate court, and even address any disagreements among beneficiaries or heirs of the estate.