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Estate Planning Part 2


Estate Planning and Probate
{Part Two}

by Kirk Livermont

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Probate is a process using the court to implement the desires contained in an individual's last will and testament.  

In addition to probate there are other simplified court procedures to transfer property interests upon death, these include small estates, under $100,000.00, and Spousal Property Petition.

Probate and these alternatives are also used when the individual dies without a will, intestate.

Probate is in essence the gathering of decedent's assets (creating a probate estate), payment of decedent's debts and distributing the remaining assets to decedent's heirs either identified in the will (testate) or by statute (intestate).

In the previous article in this series the probate process and the timing of probate were discussed in detail.  This article will discuss the costs of probate.

Within a probate there are four entities, each with associated fees (costs).  These include the court, probate referee, attorney and the executor/administrator.  In the balance of this article the term executor will be used to mean either the executor or the administrator.

To commence a probate requires a filing of a petition with the Court for which there is an $320.00 filing fee.  In addition to this filing fee, there is a $40.00 fee when ever there is a filing requiring a court hearing, other than the initial hearing.

The probate referee is an individual appointed by the court to appraise the non-cash assets of the decedents estate.  Their  fee is one-tenth of one per cent of the value of the gross estate or $75.00 which ever is greater plus costs for mileage and mapping.

The attorney and executor/administrator are entitled to  statutory fees and potentially extraordinary fees.  The statutory fees are intended to compensate them for the normal functions performed in all probates.   Statutory fees are the same for the attorney and executor and they are based upon the value of the gross estate.  These fees are a percentage of the value of the gross estate with the percentage factor declining as the size of the estate increases.  A good rule of thumb is approximately three percent.

Although the term statutory fees may imply these fees are fixed by law that is not correct.  Statutory fees are the maximum fee which may be charged by an attorney.  The executor is free to negotiate a lower fee with the attorney.

Extraordinary fees are intended to compensate the attorney or executor for unusual functions.  The most common one being the sale of real property.  Extraordinary fees are set by the court after a hearing and they are usually based upon the number of hours expended multiplied by the attorney's customary hourly billing rate.  For the executor a reasonable hourly rate is set in order to determine their extraordinary fee.

Fees paid to the executor through the probate are taxable income to the executor for federal and state tax purposes.  Consequently, when the executor is also a heir they may waive their fees and receive them as a portion of the distribution of the estate tax free.

In addition to these fees there are costs associated newspaper publication of the notice of probate ($100.00) and document certification and recording.

Besides probate, there are alternatives for surviving spouses and for estates under $100,000.00.  Respectively, these are the Spousal Property Petition and Petition to Determine Succession to Real Property.  These alternative are less costly and may be completed a a few months.  They will be discussed in detail in the next article in this series.

Kirk Livermont is an attorney with a private practice located in Independence, California providing comprehensive estate planning services.

Back to Part One

Forward to Part Three

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