PROBATE ESTATE VALUATION AND CALCULATION OF FEES

Probate is expensive! Many people are aware that probate is a generally costly process, but don’t know exactly what the costs are.  This article will break down the fees associated with probate administration, and the calculation of those fees.

Filing Fees

In San Diego, there is a $435 filing fee just to get the probate started.  Anybody objecting to the Petition for Probate on any grounds will also have to pay a $435 filing.

Additional Filing Fees

If any further Petitions within the Probate need to be filed (to confirm probate property, for instance, or to obtain an order to sell or transfer an asset), they will each cost an additional $435.

Publication Fees

A Notice of Probate must be published three times in a newspaper local to the decedent’s residence.  Each paper’s charges vary, but you can expect the notice to cost anywhere from $100 to $500.

Probate Referee Fees

The Probate Referee is a court-appointed individual whose task it is to appraise all probate assets (with some exceptions).  They are paid .1% of all appraised assets, so their fees for appraising a $500,000 estate would be $500; and would be $5,000 on a $5 million dollar estate.

Executor Fees

The executor (if nominated in the decedent’s will) or administrator (if there is no will) is entitled to take fees, which are set by statute and are calculated as follows:

4% of the first $100,000 of the gross value of the probate estate.

3% of the next $100,000.

2% of the next $800,000.

1% of the next $9 million.

.5% of the next $15 million.

So on an estate worth $500,000, the executor would be entitled to $13,000.00 in fees; on a $1 million dollar estate, the fees would be $23,000; for a $5 million dollar estate, the fees jump up to $63,000.

Attorney Fees

If the executor hires an attorney, the attorney is entitled to the same amount of fees as the executor; so another $13,000 on a $500,000 estate, or another $23,000 on a million dollar estate.

Extraordinary Fees

If the particular probate administration entails unusual or complicated circumstances, the executor and attorney could each be entitled to “extraordinary fees.”  The actual amount for these fees is whatever the probate court determines is just and reasonable given the particulars of the situation.  Any number of things can be deemed worth of extraordinary fees, including the following (the items on this list do not necessarily warrant extraordinary fees; nor is this list comprehensive):

  • Sales or mortgages of real or personal property.
  • Carrying on decedent’s business pursuant to court order.
  • Court proceedings to determine a testator’s intention concerning undisclosed beneficiaries.
  • Defense of a personal representative’s account.
  • Securing a loan to pay debts of the estate.
  • Contested or litigated claims against the estate.
  • The good-faith or successful defense of a will that is contested after the will is admitted to probate.
  • The preparation of any tax returns, or the litigation of any of those taxes.
  • Personally making repairs to property of the estate.

Valuation of Estate for Fee Purposes

Executor and Attorney fees are calculated by looking at “total amount of the appraisal value of property in the inventory, plus gains over the appraisal value on sales, plus receipts, less losses from the appraisal value on sales, without reference to encumbrances or other obligations on estate property.” (Prob. Cod. §§ 10800, 10810.)  This means, if your real property is heavily leveraged, that debt will not be accounted for when calculating executor and attorney fees.

Other Costs

There are various other costs and fees that may arise within the probate, and which will be considered valid probate expenses, to be paid from the probate estate.