What is your plan to avoid Probate and why is Probate bad?
Most people want to avoid probate for many reasons. The first reason is the expense. You will need an attorney to shepherd you through the process and their fees are prescribed under the California Probate Statutory Fees and Commissions. You can view the schedule listed below. As you can see, an average estate of approximately $500,000 would cost $13,000 in attorney fees and the executor can also charge another $13,000 for a total of $26,000. These fees do not include any of the court filing costs, publishing, appraisals or other extraordinary fees that are common. In addition, the whole process is public, and takes on average 9-18 months according to our experience. Each state is unique and the time frame will depend on the complexity. Another benefit of avoiding probate and completing an estate plan allows your assets to go to who you decide and when you decide they should receive them. If you don’t have a proper will or estate plan, you are considered to have died intestate and the probate court decides who inherits your assets using the intestacy matrix. There are many other benefits to completing an estate plan which you can find on this page.
CALIFORNIA PROBATE STATUTORY FEES AND COMMISSIONS
The Executor and the Attorney are EACH entitled to the fee shown in the table below. If extraordinary services are performed by them, the court will allow a reasonable additional fee for each of those services.
First $ 100,000 4.0%
Next 100,000 3.0%
25,000,000 To be determined by the court
Attorney Fee & Executor Commission
$4,000 * 2 = $8,000
$7,000 * 2 = $14,000
$9,000 * 2 = $18,000
$11,000 * 2 = $22,000
$13,000 * 2 = $26,000
$15,000 * 2 = $30,000
$17,000 * 2 = $34,000
$19,000 * 2 = $38,000
$21,000 * 2 = $42,000
$23,000 * 2 = $46,000
$28,000 * 2 = $56,000
$33,000 * 2 = $66,000
$43,000 * 2 = $86,000
$53,000 * 2 = $106,000
The estate accounted for in the probate includes inventory, income during administration and capital gains on sales over inventory value, less capital losses on sales under inventory value. Debts or encumbrances on property are not deducted when determining value for the purpose of fees.
There are many other reasons to have an estate plan other than just the cost and expense of probate.
Some estate plans offer other benefits such as:
- Trusts and Powers of attorney can eliminate court control of assets at incapacity
- Provides privacy- no court involvement
- Usually a much quicker and less costly distribution to beneficiaries, many estates settled under 6 months. Time to settle an estate will depend on size and complexity.
- Estate Plans allow you to choose when your beneficiaries receive their inheritance
- Avoids court control of a minor child’s distribution
- Allows you to designate Guardians for minor children
- Allows you to protect any beneficiaries share with special needs from losing governmental benefits such as SSSI or Medi-Cal or other needs based government benefits
- Allows you to choose who you want to manage your financial affairs if you become incapacitated-otherwise, you need a conservatorship
- Allows you to designate who will make health care decisions for you
- Allows you to specify your wishes and guidelines for end of life decisions
- Avoids Probate if assets are titled correctly
- Allows for property to be held separately in cases of second marriage
- Allows your health care agents to get medical records and other private healthcare information which otherwise is prevented under HIPAA laws
- Provides flexibility to change as your circumstances change over time
- Some plans can increase the exemption amount among spouses for avoiding or reducing Federal Estate Tax
- Some plans can protect child’s share if the child was a product of a former marriage. Many people who have children by different marriages want to protect those assets in case they passed on and their spouse remarried. This can be planned with some estate plans.
Contact us today for an appointment or reserve a seat at one of our workshops to start your estate plan. We can be reached at (916) 751-2440 or 1-800-877-0532.