A loved-one’s death may trigger the probate process. When it comes to probate, and probate costs in California, there are many issues to consider before the process begins.
What is probate?
You may wonder what probate is in the first place. Probate is when one’s estate is distributed in a court-supervised process after someone dies. “Estate” means all assets the deceased person left behind at their death and is usually made up of tangible personal property, money (in bank accounts and invested), and real property. The person who died, whether or not their estate goes through probate, is called the “decedent.”
The probate process includes many steps, such as determining the total value of the decedent’s assets at the time of his or her death, paying debts and bills the decedent owed, and distributing what is left of the estate to the decedent’s living beneficiaries. A properly executed will appoints an executor, sometimes called a representative, to help facilitate this process. Usually the executor is someone whom the decedent trusts and is close to. If the decedent did not execute a will, the court appoints an executor. An attorney is also involved in the process to help the executor with the probate process. Keep in mind that all of these people involved in the probate will be paid for their work at the end of the process.
When is probate required?
To determine whether probate is required: did the decedent write a will before his or her death?
If the decedent died without a will, probate is needed to pay the decedent’s bills and distribute the assets left behind. Dying without an estate plan (otherwise known as dying “intestate”) means that the court will need to facilitate this process.
If the decedent died with a will, look to your state’s probate code to determine whether the estate must be probated. In California, an estate worth $150,000 or less does not require probate. Additionally, anything owned by your living trust will not go through probate. This is one of the main benefits of creating a trust: your estate avoids the California probate fees associated with the probate process. If you have assets that are not owned jointly or by your trust, and if your estate is valued at over $150,000, your estate may be subject to the probate process.
Basic Court Probate Fees
No matter how straightforward or convoluted the estate, a filing fee is required to begin the probate process. In California, the filing fee to begin probate is $435. Other fees will be charged depending on how the course of the probate process progresses, such as to certify copies of court documents or publicizing probate notice.
Ordinary California Probate Fees
Because there are several services involved in probate, each has an associated fee. California probate fees may either be ordinary or extraordinary. Ordinary services include collecting rent, leasing property, making necessary payments, and other administrative services in the probate process.
Both the executor and attorney involved in a probate will be compensated identically for ordinary services based on a percentage of the total estate. This framework is called “statutory compensation.” Probate Code Section 10800 outlines ordinary fees for both the executor and attorney:
- Four percent on the first one hundred thousand dollars ($100,000).
- Three percent on the next one hundred thousand dollars ($100,000).
- Two percent on the next eight hundred thousand dollars ($800,000).
- One percent on the next nine million dollars ($9,000,000).
- One-half of 1 percent on the next fifteen million dollars ($15,000,000).
- For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court.
Note that, because both executor and attorney are compensated equally, the fee is essentially double – one fee for executor, another for attorney. Additional compensation is awarded to take into account litigation, reporting, filing government documents, and other work related to acting in one’s capacity as representative or attorney.
Extraordinary California Probate Fees
Along with ordinary probate fees, both the representative and attorney may also be compensated for extraordinary services. “Extraordinary” is not defined, and the court will determine what is extraordinary given the circumstances. In the past, the court determined that personal representative services such as selling property, carrying on the decedent’s business, securing loans, and other such services are considered extraordinary. For an attorney, legal services in connection with the extraordinary services of the representative, among other services, are considered extraordinary. The court will determine the proper amount of these fees; because the court is given broad discretion in these cases, extraordinary probate fees in California depend on the case.
How to avoid probate, and California probate fees
An estate plan is a combination of any of the following, depending on your needs: trust, will, power of attorneys, advance health care directive, trust transfer deed, and property assignments. Creating an estate plan usually bypasses the probate process and ensures your loved ones will not need to pay these probate costs in California.