For those who don’t know what it is, probate is just the legal process of settling an estate after an owner passes away. The simplest way to think about it is this - your estate will first need to pay any debts and taxes, and then distributions can be made according to the instructions you leave about beneficiaries and inheritances. Depending on how you set it up, your estate may need to go through probate so the courts can begin the process.
It’s important to understand that not all estates need to go through probate. And, there are smart, strategic ways you can make probate easier or even eliminate it all together.
Why would you want to avoid or simplify the probate process? In short, because probate can be an utter nightmare for your loved ones. It’s often time-consuming, expensive and very stressful for those left to navigate it.
Breakdown of The Most Common Probate Fees
Perhaps one of the biggest drawbacks to probate is the cost. And the more it costs, the less inheritance your beneficiaries will receive. Total cost can widely vary, depending on a number of factors including:
The state you live in
The size of your estate
How complicated your Estate Plan is
Whether or not someone contests any part of your plan
But there are some things you can count on being fairly consistent in the probate process. Following are some of the most common fees likely to be incurred at some point during probate, regardless of other circumstances.
Cost of a Probate Attorney and Accounting Fees
Many people feel more comfortable hiring a probate attorney to help them navigate the process. And in some states, you’re actually required to do so by law (although most states do not mandate this). A probate lawyer's fees (and most other costs of probate) are paid out of the estate, so your family will not need to worry about who pays probate fees, and they won’t have to cough up any money out of pocket. But again, accounting and probate attorney fees will ultimately reduce the overall value of your estate. At the end of the day, that’s money that could be going to your beneficiaries.
Probate lawyer fees can vary - lawyers can charge hourly or a flat rate. Some states allow probate attorneys to charge a fee based on a percentage of the estate value.
Any time you go to court, you should expect to pay some sort of fees. For probate court, fees can depend on individual county and state filing fees, as well as other factors. Because there’s no standardized probate court fee schedule across the nation, just like attorney fees, the cost will differ depending on where you are. But you should expect to pay most of the following common fees along the way:
Filing Fee - The initial fee you’ll pay to petition the court and begin the process. Based on the estimated size of the estate to be settled. *Filing fees can generally range anywhere from $50 - $1,200.
Certificate Fee - There will be a fee to issue common certificates you’ll need. You’ll likely be asked for Letters of Testamentary or Administration at some point. These official certificates have the court’s seal and authorize an Administrator or Executor to act on the deceased estate owner’s behalf. You’ll need this for several institutions like the DMV, banks, insurance companies, etc. *Certificates can range anywhere from $5 - $20 per certified copy; you may need originals for certain institutions, while others might accept a photocopy; you can order extra certified copies from the court if you need more than they give you.
Notifications - Part of settling an estate includes notifying beneficiaries and heirs. It’s best to do this through certified mail with a signature requirement. You may also be required to put a public notice announcing the estate in a local paper.
*Notifications can range between $10 - $300.
Executor and Bond Fees
A Surety Bond isn’t always required, and many Wills directly state one is not needed. If this is the case, most often a court will allow you to forgo the bond. Surety Bonds offer insurance that protect the estate against anything questionably done by a representative throughout the process. If a bond is required, the amount is typically determined by the estimated size of the estate.
Executors can charge a fee to be reimbursed for most expenses they incur. This can include the cost for any travel needed, to pay for tax prep, to buy any supplies, or for anything else required to settle an estate. Executors can also be reimbursed a fair fee for the job they do as a representative of an estate. State laws dictate how much an Executor can charge (usually a max of 3 - 5 percent of the estate value).
There may be other miscellaneous fees related to probate. Some of these could include:
Business Valuation Fees
Estate Sale Prep Fees
Probate Costs by State
Since the probate court process is not streamlined, the average cost of probate can vary depending on the state you’re in and the size of an estate. Wondering what are probate fees in a certain state? Check out our individual state-specific posts on the cost of probate.
Can You Avoid Paying Probate Fees?
Looking for advice on how to set up your estate to reduce or perhaps entirely avoid probate fees? Fortunately, there are a number of strategic ways you can put an Estate Plan in place that allows you to do just that.
Create a Trust - Trusts avoid probate, making the process of settling an estate simpler, cheaper, and for some people, most importantly, more private. Trusts are not public at all, whereas probate is a public proceeding. If you’re concerned about privacy, creating a Trust can kill the proverbial two birds with one stone by allowing your estate to avoid probate fees and keep things private.
Create Payable on Death or Transfer on Death Accounts - Payable on Death (POD) and Transfer on Death (TOD) accounts do exactly what they sound like. Upon your death, they immediately transfer any assets to your named beneficiaries without any cost and no need for a court to be involved.
Open Life Insurance Policies - Much like a POD and TOD account, life insurance policies have named beneficiaries, and payouts can be made often with as little as a death certificate provided. There may be a nominal charge to get the death certificate, but it will be dramatically less than any probate process would ever be.
Update Your Beneficiaries & Include Contingent Beneficiaries - It’s always a good idea to audit your accounts every few years to ensure beneficiaries haven’t changed. You might want to update beneficiaries due to a marriage, death, birth or any other major life event. Ensuring your beneficiaries are correct, and naming contingent beneficiaries (back ups) in case your first choice is unable or unwilling to accept an inheritance is just smart. It offers double protection that your estate will be distributed in a timely manner.
Title Property Jointly - Jointly titling property means that, upon your death, property automatically passes to your significant other (or whomever else is on the title). Some states are deemed Community Property States, making community property with a right of survivorship even easier.
Small Estate Allowance - Most states have a threshold that allows “small estates” under a determined value to go through an expedited and cheaper process.
EZ Probate - The probate process can be lengthy and complicated, especially during a time of grief. If this is something you don't want to go through alone, consider getting help from the experts at EZ-Probate. They offer unparalleled support and guidance to simplify the probate process.
How Long Does Probate Take?
Probate can take anywhere from a few months to several years to fully complete. For most estates of average size, the process will range from six months to two years. If an estate is especially large, if any heirs contest anything, or if beneficiaries cannot be found, things will take longer. Keep in mind, the longer the process takes, the more expensive it becomes.
Probate is time consuming, costly and often very stressful for those left to deal with it. Properly and strategically setting up your Estate Plan can protect your loved ones and simplify the process. This means they can move towards closure more quickly after your loss, and that may just be one of the best gifts you could ever leave your friends and family.
Do you or a loved one need more information about the probate process? Learn more from the experts at EZ-Probate. They offer as much guidance as you need, from providing ready-to-sign documents to complete hand-holding every step of the way. Ready to get started? Schedule your free consultation.