Paying attorney fees in probate can be costly. Depending on the value of the estate, probate attorney fees in California can easily run over ten thousand dollars for even the most simple probate. Fortunately, there are certain estate planning instruments that can be used to avoid probate altogether and the payment of such fees. If probate is required, there are other low-cost options other than using an attorney to get through the probate process. You don’t need an attorney to file probate. Read on to learn more about attorney fees in probate.
What are Attorney Fees in Probate?
Under California law, an attorney that probates an estate gets paid a statutory fee and often added fees known as “extraordinary fees.” The statutory attorney fees in probate is determined and calculated on the value of the assets that go through probate. The percentage is set out in the state statutes (See Cal. Probate Code section 10810 and 10811).
How are Probate Attorney Fees in California Calculated?
California uses a 4-3-2-1 system to calculate statutory probate attorney fees. The attorney is entitled to receive 4% of the first $100,000 of the estate’s value, 3% of the next $100,000, 2% of the next $800,000, and 1% for amounts over $1 million. For example, say a home in Ventura County has a fair market value of $750,000. Under the 4-3-2-1 system, statutory fees will be calculated as follows:
- 4% of the first $100,000=$4,000
- 3% of the next $100,000=$3,000
- 2% of the next $550,000=$11,000
The total statutory probate fee would be $18,000, a very large amount given the amount of legal work involved. Unfortunately, statutory probate attorney fees are based on the total fair market value of all the estate’s assets. Use our convenient online probate calculator to determine the statutory attorney fees in probate for a particular valued estate.
What are Extraordinary Attorney Fees in Probate?
Extraordinary attorney fees are fees paid to the attorney probating an estate for extraordinary services — that is, services that fall outside of the routine services typically required for probate. Extraordinary fees are based on the following:
- The value of the estate
- The time spent performing extraordinary tasks
- Whether the outcome obtained benefits the estate
Extraordinary fees tend to arise in the event of the sale of real property, handling creditor claims against the estate, probate litigation, or handling difficult tax issues while administering an estate. The probate court must approve the ordinary and extraordinary fees. Often real property is sold by the estate representative during the probate process, so it is quite common for many probated estates to incur extraordinary fees on top of the statutory fees.
How Do Attorney Fees in Probate Get Paid?
The executor of the estate does not pay the attorney fees. Instead, the estate will pay such fees. Sometimes the attorney will require that the minimum statutory fee be paid upfront. In other situations, the attorney will allow the payment to be made upon final distribution of the estate assets. Prior to an estate being closed, the court will confirm the request for payment of attorneys fees for handling the probate. As mentioned above, attorney fees are set by statute. The statute also sets the procedure in which the attorney asks for the fees. Attorneys fees have priority over the payment of any other claims as well as distribution of assets to the beneficiaries.
Ways to Avoid Probate Attorney Fees
Many estates do not need to be probated. Probate can be avoided. The following methods can be used to eliminate attorney fees in probate or avoid probate altogether:
- Set up a living trust. Assets owned through a living trust do not need to be probated.
- Title real property in joint tenancy. Real property owned as joint tenant with right of survivorship does not need to be probated.
- Investigate probate alternatives for estates under $166,250. Small estates of less than $166,25 do not need to be administered through a full probate and can be settled using cheaper, simplified procedures.
- Spousal property petitions can be filed to change the titles of the assets to the surviving spouse’s ownership to avoid probate.
- Don’t hire an attorney to probate a simple uncontested estate. Using the services of a professional, experienced legal document assistant to handle the probate process will save you and the beneficiaries thousands of dollars. To determine your savings, use our probate calculator.
Proper estate planning is key to avoiding paying probate attorney fees. If an estate does need to be probated, however, there are cost-savings procedures one can take. Contact A People’s Choice for more information about how to avoid paying unnecessary attorney fees in probate. Call today at 800-747-2780.