How Much Does Probate Cost?
Probate costs can vary by state
Your loved ones will be faced with probating some or all of your assets if you don't have an estate plan and haven't taken steps to avoid the process. The overall cost of probate can vary depending on the type and the value of the estate's property. In general, the greater the value, the more probate will cost.
You can probably count on your estate paying anywhere from 2% to 7%, or even more in some isolated cases.
Court fees are dictated by state law and can range anywhere from a few hundred dollars to over a thousand dollars. It depends a great deal of the complexity of the estate and how many different forms must be filed. More complicated estates require more forms.
The filing fee to open probate is typically a few hundred dollars. It's the same for all estates in some states, while others charge on a graduated scale with more valuable estates paying more.
Executor fees are also dictated by state law, although decedents can specify in their wills just how much their nominated executor—also sometimes referred to as the personal representative—should be paid. State law will apply when a will is silent regarding this provision.
Some states simply provide for a "reasonable fee" without citing a specific amount. Others set fees that are equal to a certain percentage of the value of the property being probated, such as 4% of the first $100,000, then 3% of any balance.
A "reasonable" or "fair" fee usually runs in the neighborhood of 3% of the value.
A personal representative can ask for "extraordinary fees" for services rendered above and beyond basic probate duties. This might be the case if the decedent leaves a business that must be sold or otherwise transferred to beneficiaries.
These fees are also dictated by state law and they're usually calculated in the same way as the personal representative's fee. An attorney can also ask for "extraordinary fees" for services rendered above and beyond those that are deemed to be basic probate duties.
Not all estates require an attorney, however. Less complicated estates would most likely not bear this cost.
These fees will vary depending on the overall value of the estate and the type of assets owned. A small estate that nonetheless owns 25 different stocks and bonds can generate more accounting fees than a larger estate that owns just a primary residence, a bank account, and a CD.
Accounting fees can include the preparation and filing of estate tax returns if the estate is taxable at the state or federal level. Sometimes the attorney for the estate will prepare and file these returns.
Appraisals and Business Valuation Fees
Probate will require date-of-death values of real estate, business interests, and personal property, including assets like jewelry, antiques, artwork, boats, and cars. 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.
Your personal representative or executor will have to pay for and post a bond in an amount determined by the probate judge before they can be appointed. The estate usually pays for this.
Some probate judges have required that bond be posted even when the estate has minor beneficiaries. You can waive the bond requirement in your last will and testament, but a judge might overrule your wishes if children are involved.
Miscellaneous fees can range from the cost of postage to insuring and storing personal property, shipping personal property, and more.
You can count on these costs to eat up anywhere from 3% to 8% of the value of your assets. And this doesn't include any estate and income taxes that might be due and payable during the course of the probate administration. Taxes can further deplete an estate.
Not All States Require Probate
Estates of minimal value can almost invariably dodge these costs because the probate process is not required for them by law. A simplified, streamlined process is often in place to accommodate them even when probate is required. Only estates that top a certain value threshold must be probated, so others will escape many of these fees.