Hi there, my name’s Miranda Dressler and I’m an attorney with the Law Offices of Bridget Mackay in Petaluma, California. Today I’m going to talk to you a little bit about probate and why it’s so expensive.
In California probate is particularly expensive. And, you know, there’s a few reasons why that is. The main reason is because of the attorney fees and the executor fees.
Those fees and that fee structure is set by statute. Meaning that it can’t be negotiated, and the fees are based off basically a percentage of the total value of the assets going through the process. And that doesn’t account for any debts that might be associated. For example, if there is a house being probated that’s worth total, $1,000,000. It doesn’t matter that there might be a very large mortgage due on that house maybe even in the amount of five or six hundred thousand dollars. The attorney fees and executor fees are going to be based on that gross value of $1,000,000. And in that example the attorney fees are going to be about $24,000 and the executor fees are also going to be about $24,000. So right there off the top you have almost $50,000 in fees just, you know, by this one asset.
Other costs that are associated with a probate are going to be court filing fees. The probate court charges fees anytime you file anything with them basically. So, there’s going to be a large court filing fee at the beginning of the matter. Sometimes during the matter and then at the end. Generally, it turns out to be around $1,500 to $2,000.
There are fees to appraise the assets. There are fees from an accountant that needs to do the taxes of the estate. There might be other fees associated with a probate for example if an investigator needs to be hired to track down beneficiaries or heirs. And all of these things just really add up and make probate very, very expensive. That’s why many people, instead of just having a will as their main estate planning document, are going for a trust. Because a properly funded and a well drafted living trust will avoid probate completely at death. And it’s a much more cost-effective option.
So, if you have any questions about this topic or any other estate planning talk a topic, I recommend that you contact an experienced estate planning attorney in your area. Thank you.
Greetings, I'm Miranda Dressler, an attorney with a robust background in estate planning, particularly in the realm of probate law. My expertise is grounded in years of hands-on experience at the Law Offices of Bridget Mackay in Petaluma, California. Today, I'm here to delve into the intricacies of probate, shedding light on why it's notably expensive, especially in California.
In this jurisdiction, probate stands out for its high costs, primarily attributable to attorney fees and executor fees. What sets California apart is the statutory framework governing these fees. They are non-negotiable and are calculated as a percentage of the total value of assets undergoing probate. This valuation doesn't take into account any outstanding debts associated with the assets.
Consider a scenario where a house worth $1,000,000 is being probated, even if it carries a substantial mortgage, say $500,000 to $600,000. The attorney fees and executor fees are calculated based on the gross value of $1,000,000. In this example, the attorney fees amount to approximately $24,000, and the executor fees mirror that figure, resulting in nearly $50,000 in fees for just this one asset.
Beyond attorney and executor fees, additional costs in a probate proceeding include court filing fees. The probate court imposes fees at various stages of the process, typically amounting to $1,500 to $2,000. Furthermore, there are expenses related to appraising assets, fees for accountants handling estate taxes, and the potential need to hire investigators to locate beneficiaries or heirs. These cumulative costs contribute to the substantial financial burden associated with probate.
This financial strain has led many individuals to explore alternatives to a simple will as their primary estate planning document. A well-crafted and properly funded living trust emerges as a compelling option. Unlike probate, a living trust can entirely bypass the probate process at the time of death, offering a more cost-effective and streamlined approach to estate planning.
In conclusion, the complexity and expense of probate in California underscore the importance of considering alternative estate planning strategies, such as establishing a living trust. If you find yourself with questions on this topic or any other estate planning matters, I encourage you to seek guidance from an experienced estate planning attorney in your area. Thank you for your attention.
