Probate costs in California can be hefty so it behooves those who are considering future plans for their estate to be educated on what probate expenditures actually are. Probate is the state’s way of overseeing the administration of one’s estate after death, making sure that debts and taxes are paid and that the correct beneficiaries receive what they are entitled to.
As a general rule, if one dies without a will, their estate is subject to probate. Even if one has a will, however, if an estate has real estate and other assets, a probate may still be necessary. A sizable estate (more than $150,000 in California) usually employs a living trust to avoid the probate process.
A complicated probate can last from seven months to two years or more. In California there are expedited probate procedures for smaller estates, usually those estates under $150,000, and those procedures take considerably less time. Anyone who has real estate in California, however, is usually over the $150,000 threshold.
There are many factors that go into the probate cost process. At first, an executor has to marshal the deceased’s assets and debts. If an estate is large and complicated, that can take some time, particularly if the deceased was not organized and had substantial holdings. The services of an accountant or attorney may be required, adding to time and expense. Then there is a period of mourning as the deceased is buried or cremated with attendant memorial services. After that, special pleadings have to be filed with the Probate Court in order to open up the probate procedure. That will usually require the services of an attorney, which will involve a retainer agreement. Then there is the court filing fees to open up a probate. In California the Probate Petition filing fee is $435.
Usually, there is an initial court hearing to appoint the administrator of the estate. If complications arise, then there can be multiple court hearings over many months. That will involve considerable attorney time.
Among the complications that a Probate might face which will add to costs are:
— Ambiguities in the will
— Difficulty locating assets
— Debt disputes
— Lawsuits against the estate
— Difficulty finding beneficiaries
— Complicated tax issues
— A challenge to the will of some kind or a challenge to the choice and/or behavior of an executor.
Other cost factors can include bond, accounting fees, appraisal costs, personal representative fees, and other court costs. In California the cost of probate is set by statute in the California Probate Code and when all costs are factored in, a probate can cost from 3-7% of the gross value of the estate. Of course, an estate can always try to negotiate with an attorney, for example, to pay an hourly rate instead of the statutory fee. Taken in its entirety, the cost of a probate can be considerable. If there is a will dispute that is not quickly settled, lengthy litigation costs will start to soar.
Further, there is another type of ‘cost.’ When a person does not have a will, their estate will go by ‘intestate succession’, or the inheritance rules of the California Probate Code. That could mean, for example, that long out-of-touch and estranged relatives may inherit a deceased’s estate. That may not be the intent of the deceased. That kind of cost is hard to calculate.
It is usually a wise idea to consult with an experienced estate planning attorney to discuss probate and go into detail as to all the factors that make up probate costs as one is contemplating the future planning of their estate.