Unfortunately, many people are shocked to discover just how expensive probate really is! Between filing and hearing fees and statutory attorneys fees, the cost of probate can easily rise to tens of thousands of dollars. Further, many people also fail to realize that the size of the estate under review has a direct effect on probate cost! In fact, estate size is the number one determinant of probate cost when using an attorney.
Statutory Attorneys’ Fees in Probate Cost
California’s Probate Code Section 10810 outlines the state’s requirements for attorney compensation for probate cases. Instead of an hourly fee, California probate attorneys are compensated a certain percentage of the estate’s value. More specifically, California probate law states the following:
(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).
Unfortunately, these fees are NOT the only fees the estate must pay in a probate case. In fact, filing petitions for probate and final distribution alone will cost the estate over $800! That said, statutory attorneys’ fees are clearly the greatest expense of probating an estate.
Determining an Estate’s Value
As demonstrated above, attorneys’ fees for California probate depend entirely upon the value of the estate. However, which assets should one use to calculate an estate’s value? According to California Probate Code Section 10810, the value of the estate is:
the total amount of the appraisal of property in the inventory +/- gains/losses over the appraisal value on sales + receipts
First, the inventory and appraisal process is a mandatory probate procedure in which a personal representative and a probate referee determine the monetary value of the decedent’s property. Note that representatives must also include cash assets on an inventory and appraisal form. Then, once this number is determined, the court will also take into account any gains – or losses – made on sales of assets. Finally, they will also add in any receipts of interest, refunds, etc. The final number is the value of the estate on which the attorney will base their fees. Note that this number does not reflect the estate’s outstanding debt; instead, the fees are determined on the value of the estate before debt.
Attorneys’ Fees for Extraordinary Service in California Probate
In addition to the statutory fees, probate attorneys in California may also charge extraordinary service fees at the court’s discretion. The court will determine whether the attorney may charge these fees based on what extraordinary measures they took and the outcome of those efforts. Some examples include preparing tax returns, handling creditor claims, selling real property, and litigating an interested party’s contest of the will.
Other Costs of Probate
Luckily, attorneys’ fees in California are the most expensive part of the process. That said, the estate will also have to pay fees for the following probate procedures. Note that this is not a comprehensive list.
- Filing court documents
- Court reporter hearing
- Newspaper publication
- Copies of original legal documents
- Probate referee
How Cost of Probate Increases With Estate Value
As the size, or value, of an estate increases, so does the cost of probate. This is largely in fact due to statutory attorneys’ fees. For example, for an estate worth $500,000, attorneys’ fees would be calculated as follows:
4% of the first $100,000 = $4,000 PLUS
3% of the next $100,000 = $3,000 PLUS
2% of the next $800,000 = $6,000
$13,000 in statutory attorneys’ fees on a $500,000 estate!!
In addition to the attorney, the estate representative is also entitled to statutory compensation, as outlined in Probate Code Section 10800. However, the representative typically waives these fees. That said, this reference chart of the combined fees for both the executor and attorney exemplifies how probate cost increases with estate value:
|PROBATE ESTATE VALUES||TOTAL ATTORNEY AND EXECUTOR FEES*|
*Note that an attorney will receive one half of the sum above and the executor will receive the other half. This is a simplified version of fee schedules for the probate process and should only be used as a reference guide. The court allows higher fees, especially in complex cases, so the actual sum may exceed the figures in the table above.
Save on the Cost of Probate With A People’s Choice
While some probate fees are unavoidable, you do not always have to pay attorneys fees for probate. In fact, working with a registered legal document assistant such as A People’s Choice instead of an attorney could save you thousands of dollars. A People’s Choice offers flat-fee, low cost probate services that include assistance completing and filing probate paperwork with the court.
A People’s Choice has over 40 years’ experience assisting self-represented executors of estate with probate matters in California. Call us today or quick start your probate with our easy-to-use online interview process!