Probate is a Costly Court-Supervised Process
If you don't have an estate plan or have failed to completely fund your Revocable Living Trust, then your loves ones will be faced with probating some or all of your assets. The overall cost of probate will vary depending on the type and value of the property that's being probated. In general, the greater the value of the probate property, the more probate will cost. The various fees and costs associated with probate are as follows:
These fees are also dictated by state law. Some states simply provide for what is referred to as a "reasonable fee," while others deem a reasonable fee to be one that's equal to the value of a certain percentage of the property being probated. Even then, the Personal Representative can ask for "extraordinary fees" for services rendered above and beyond services that are deemed to be basic probate services.
These fees will vary depending upon the overall value of the estate and the type of assets owned. For instance, a small estate that nonetheless owns 25 different stocks and bonds may generate more accounting fees than a larger estate that owns a primary residence, a bank account and a CD. Of course, if the estate is taxable at the state and/or federal level, then the accounting fees may include the preparation and filing of the state and/or federal estate tax returns if the attorney for the estate doesn't prepare and file the returns.
These fees will be necessary to determine the date of death values of real estate, personal property (including jewelry, antiques, art work, boats, cars and the like), and business interests. Appraisal fees for personal property can range anywhere from a few hundred to a few thousand dollars, while business valuation fees will run several thousand dollars.
If you don't have a Last Will and Testament that waives the posting of a bond by your Personal Representative, then in most cases before your Personal Representative can be appointed he or she will need to pay for and post a bond in an amount determined by the probate judge. I've also run into situations where the probate judge has required a bond to be posted even though the Last Will and Testament waived the posting of a bond simply because minor beneficiaries were involved.
These fees can range anywhere from the cost of postage to mail notices to the Personal Representative and beneficiaries and to mail documents to the court and taxing authorities; to the cost of insuring and storing personal property; to the cost of shipping personal property; to the cost of moving personal property.
After adding up all of these fees and costs, you can count on probate taking anywhere from 3%-8% of your assets away from your beneficiaries, which doesn't include estate and income taxes that may be due and payable during the course of the probate administration. Compare this with the cost of settling a Revocable Living Trust, which will range anywhere from less than 1% to 5% of your assets.
How to Open a Probate Estate
•Court Fees
These fees are dictated by state law and can range anywhere from a few hundred dollars to over a thousand dollars.•Personal Representative Fees
These fees are also dictated by state law. Some states simply provide for what is referred to as a "reasonable fee," while others deem a reasonable fee to be one that's equal to the value of a certain percentage of the property being probated. Even then, the Personal Representative can ask for "extraordinary fees" for services rendered above and beyond services that are deemed to be basic probate services.
•Attorney's Fees
These fees are also dictated by state law and are calculated in the same manner as the Personal Representative's fee. And, as with the Personal Representative's fee, an attorney can ask for "extraordinary fees" for services rendered above and beyond services that are deemed to be basic probate services.•Accounting Fees
These fees will vary depending upon the overall value of the estate and the type of assets owned. For instance, a small estate that nonetheless owns 25 different stocks and bonds may generate more accounting fees than a larger estate that owns a primary residence, a bank account and a CD. Of course, if the estate is taxable at the state and/or federal level, then the accounting fees may include the preparation and filing of the state and/or federal estate tax returns if the attorney for the estate doesn't prepare and file the returns.
•Appraisal and Business Valuation Fees
These fees will be necessary to determine the date of death values of real estate, personal property (including jewelry, antiques, art work, boats, cars and the like), and business interests. Appraisal fees for personal property can range anywhere from a few hundred to a few thousand dollars, while business valuation fees will run several thousand dollars.
•Bond Fees
If you don't have a Last Will and Testament that waives the posting of a bond by your Personal Representative, then in most cases before your Personal Representative can be appointed he or she will need to pay for and post a bond in an amount determined by the probate judge. I've also run into situations where the probate judge has required a bond to be posted even though the Last Will and Testament waived the posting of a bond simply because minor beneficiaries were involved.
•Miscellaneous Fees
These fees can range anywhere from the cost of postage to mail notices to the Personal Representative and beneficiaries and to mail documents to the court and taxing authorities; to the cost of insuring and storing personal property; to the cost of shipping personal property; to the cost of moving personal property.
After adding up all of these fees and costs, you can count on probate taking anywhere from 3%-8% of your assets away from your beneficiaries, which doesn't include estate and income taxes that may be due and payable during the course of the probate administration. Compare this with the cost of settling a Revocable Living Trust, which will range anywhere from less than 1% to 5% of your assets.
How to Open a Probate Estate
