March 13, 2014
Cost of Probate Statutory Fee - How Much, When Paid and From Whom?
The cost of probate is one of the main reasons why many individuals opt to write a revocable trust so as to avoid it. Below is a table which details the fee that the attorney can collect for estates valued up to $1M. As can be inferred, the cost of probate is directly proportional to the size of the estate. The larger the estate, the higher the fee and vice-versa.
The table below is for ordinary compensation. If the attorney performs services beyond which is expected of them, they may petition for extraordinary compensation. This fee is not set by statute. Rather it requires a declaration by the attorney, and his or her staff, which documents their hourly rate and the amount of time they expended on the matter. A common reason to petition for extraordinary compensation is if real property was sold during probate.
Estate Value Statutory Fee
$100,000 $4,000
$200,000 $7,000
$300,000 $9,000
$400,000 $11,000
$500,000 $13,000
$600,000 $15,000
$700,000 $17,000
$800,000 $19,000
$900,000 $21,000
$1,000,000 $23,000
While probate fees can be seen as quite high, there are two notable aspects that should be mentioned when discussing probate fees.
1. Timing of payment of probate fees
Generally, the attorney collects the above fee when probate has concluded, i.e. following the order for final distribution. Hence, the fee is not collected when the proposed personal representative initially retains the attorney. In particular, it is violation of a California Rule of Court for the attorney to collect the statutory fee absent a court order.
Since probate usually takes months to complete, 9 months is a reasonable estimate, there is no immediacy to this probate fee. The attorney must wait patiently for probate to conclude. This is in stark contrast to the normal payment of attorney fees. Almost universally an attorney will ask for some payment, i.e. a retainer, before engaging a client's matter. Yet in probate, the attorney has to wait 9 months or so to be compensated.
2. Source of probate fees
Probate fees are an estate expense instead of a beneficiary's personal expense. For example, if the estate's sole asset, e.g. a bank account, was appraised at $400,000, the $11,000 statutory fee will be subtracted from that $400,000 figure. The fee will not be collected from the beneficiaries.
Labels:
Attorney Fees,
Probate Fees,
Revocable Trust