Probate

Probate is the court supervised process to distribute your assets to the next generation. In California your assets are subject to the Probate Court’s supervision if you have assets titled in the decedent’s name in excess of a certain amount. Being subject to the Probate Court can be a hassle for heirs. 

Clients like to avoid probate for 3 main reasons:

  1. The Probate Process is SLOW (average time is 1-2-years of court proceedings);
  2. Public (think of all the celebrity estates you’ve heard about in the news);
  3. Expensive! Certainly, in comparison to what it costs to avoid probate by completing an estate plan. Probate often costs 10x more than estate planning. The probate code sets the fees at a percentage of the assets in the estate (see rates below). 

A common misconception is that the government gets the money from probate – but that’s not entirely true. It is the attorney who helps the family through probate that is entitled to the fees. There are significant costs in addition to the attorney’s fees shown here – such as newspaper filings, court filing fees, court appointed appraiser fees, and more! 

 

Don’t miss the fact that the probate court doesn’t care about the ‘encumbrances’ – that means if the house is worth $300,000 the probate fees will be $9,000, plus costs regardless of any fact that the house has a mortgage against it. 

 

Here is the actual probate code spelling out the costs:

Compensation of Attorney For the Personal Representative [10810 – 10814] ( Heading of Article 2 amended by Stats. 1996, Ch. 563, Sec. 27. )

10810. (a) Subject to the provisions of this part, for ordinary services the attorney for the personal representative shall receive compensation based on the value of the estate accounted for by the personal representative, as follows:

  1. Four percent on the first one hundred thousand dollars ($100,000).
  2. Three percent on the next one hundred thousand dollars ($100,000).
  3. Two percent on the next eight hundred thousand dollars ($800,000).
  4. One percent on the next nine million dollars ($9,000,000).
  5. One-half of 1 percent on the next fifteen million dollars ($15,000,000).
  6. For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court.

(b) For the purposes of this section, the value of the estate accounted for by the personal representative is the total amount of the appraisal of property in the inventory, plus gains over the appraisal value on sales, plus receipts, less losses from the appraisal value on sales, without reference to encumbrances or other obligations on estate property.

See how much your estate would cost in probate and then contact us to help you avoid it and put all your affairs in order with a complete estate plan!

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