High probate attorneys and administrators fees are mandatory
Probate court is the legal way for ownership transfer on death
Probate court is generally necessary to transfer ownership of property and accounts upon someone’s demise. Thus, if a person has not organized his/her ownership of assets, a Probate Court proceeding will be necessary to access bank accounts, pay bills and taxes and to transfer ownership to the heirs.
There are two major exceptions:
- Assets held in joint tenancy avoids probate because the surviving joint tenant gets 100% legal ownership. Joint tenancy has its pitfalls and must be fully understood before it is used. For example,
- Assets held in a revocable living trust avoid probate because the trust owns the assets and not the deceased person. The Probate Court system is not needed for transfer of assets of a properly prepared and fully funded living trust.
Probate court statutes set Probate mandatory Fees and administrator’s (Executor’s) fees as follows:
The mandatory fees on an estate valued at $1,500,000 would be as follows: 4% of the first $100,000
3% of the next $100,000
2% of the next $800,000
1% of amt over $1,000,000 =
Total probate fees for $1,500,000 estate = $28,000.00
High mandatory fees even if little equity
The fees are calculated on the asset “valuation”, not on the equity. Thus, if the probate estate has a house valued at $1,500,000 and the loan is $1,000,000 leaving an equity of $500,000, the mandatory attorneys and excutors fees would be $28,000 each for a total of $56,000. This would be $56,000 in fees to probate a house. If the house were in a living trust, there would still be fees for the attorney and for the trustee (executor) but those are subject to negotiation. Typically attorneys fees to administer the house in this situation would by most likely less than $10,000.
A living trust will prevent your estate from having to pay High probate attorneys and administrators fees.