Primer On Probate
We receive many inquiries regarding probates, such as: How much do they cost and how long do they take?
In previous newsletters, we have indicated that through the use of revocable and irrevocable trusts, and other mechanisms, probates can be avoided. We have also explained how certain assets will not be subject to probate, if they are titled in a certain manner. For instance, using my usual example of the home, a husband and wife can name each other as surviving beneficiary on the face of the deed, stating that title is held by husband and wife with right of survivorship. When the first spouse dies, title will vest on the record with the surviving spouse, with a minimum of paperwork. However, without more planning, there will be a probate on the death of the second spouse.
How much will it cost to probate the home and other assets?
There are two fees in California probates, one for the executor and one for the attorney. The fees for each are calculated the same way pursuant to the probate code, and are based on a percentage of the value of the estate. Usually the executor is a family member who will waive his or her fee.
The fee structure is applied as follows:
|
Percentage
|
Fee
|
Cumulative Fee
|
|---|---|---|
|
4% of the first $100,000
|
$4,000
|
$4,000
|
|
3% of the next $100,000
|
$3,000
|
$7,000
|
|
2% of the next $800,000
|
$16,000
|
$23,000
|
|
1% of the next $9,000,000
|
$90,000
|
$113,000
|
|
1/2 of 1% of the next $15,000,000
|
$75,000
|
$188,000
|
So for instance, applying the formula, the fee for the probate of the home worth $500,000 would be $13,000. The fee for an $800,000 home would be $19,000, and the fee for a $1,000,000 home would be $23,000. Other assets to be probated at the same time would be added to the formula. There would also be costs for filing fees, publication in the newspaper and court appraisals.
How long does it take?
A probate can theoretically be completed in six months when all goes perfectly well, all parties are cooperative, and there are no “food fights” or complications. Eight months to a year is more typical. Contested probate matters can take one to three years or longer to complete. The probate procedures are very technical and procedurally complex. An attorney familiar with this area of the law should be consulted.
Other Probate & Trust Newsletters
Avoiding Probate in California
Funding Your Revocable Living Trust
Can I Have a Trust for My Pet? Yes!
“My Son In Law is a Big Fat Dummy.” Remedy: The Personal Asset Trust
The Revocable Living Trust – Preparing for Incapacity