What Are Probate Fees?
The cost of probate and probate fees (two separate things) varies dramatically from state to state, making it impossible to summarize legal fees or average cost for probate by state. What I can outline are the costs of probate and the fees in probate in California, which should at least give a framework for understanding the system of probate fees and costs across the United States.
In California, both probate fees and probate costs are highly regulated. It is part of the larger effort to protect beneficiaries of an estate.
Let’s look at fees first. There are two kinds of probate fees 1) probate lawyer fees 2) the fees for the personal representative of the estate.
The fees are the same for both parties and they are both set by a declining schedule set by the gross value of the estate. The schedule is as follows:
Probate Attorney Fees / Estate Representative Fees
- 4% of the first $100,000
- 3% of the next $100,000
- 2% of the next $800,000
- 1% of the next $9,000,000
Here is an example of how the schedule works:
Note there is no discount for debts associated with the estate, including the mortgages on real property.
Our example estate has one asset, a house, with a gross fair market value of $300,000.
The fees are calculated as follows:
- $100,000 x 4% = $4,000
- $100,000 x 3% = $3,000
- $100,000 x 2% = $2,000
Both the probate attorney and the administrator of the estate are entitled to their fees; thus the total in a $300,000 estate would be $9,000 x 2 = $18,000.
Sometimes the personal representative of the estate, sometimes known as the administrator or the executor, will waive their fees since in most cases they are one of the major beneficiaries of the estate; among other things, the fees to a personal representative are taxable but an inheritance generally is not so it may be better to decline the fees rather than receive it as taxable income.
The probate costs are separate from and in addition to the fees to the attorney and/or the personal representative. In California, the costs of probate are dictated by a variety of mechanisms that are designed to protect the beneficiaries of an estate.
The probate requirements that figure into the total cost are the:
- publication of notice of the proceedings
- payment of a probate referee to appraise the property in the estate
- probate court fees – filing fee obtain a court hearing
- probate bond cost
These costs vary from county to county and they tend to increase over time. To give some kind of idea of the total amount in question, here is an example. A small estate in California, with a value of less than $500,000, costs approximately $1,000 in 2014, not including the bond premium. However, probate costs, like the probate fees, also increase with the value of the estate.
The variation in the fees and costs for probate in California makes it harder to decide what form of estate planning is appropriate for a person. A living trust costs substantially more than a simple will to prepare, so here are the guidelines I give my clients to determine whether the living trust is worth the upfront cost. Even in a modest estate, with a total value of assets of about $300,000, the total cost of probate, including fees, is presently (2014) about $10,000. This includes $9,000 in attorney fees (if the administrator waives their fees) and $1,000 in probate fees.