Sunday, November 23, 2014

Probate


If a deceased person left property that does not fall under any exclusions to probate, a probate proceeding is necessary to transfer assets to beneficiaries. Whether there is a will or there is no will, probate is necessary to ensure that the estate is properly inventoried and distributed and all debts and taxes are paid. Generally, if there was no living trust or other strategy which keeps assets out of the probate estate then opening probate in a court of law is the only way to distribute assets.

Probate can take 6 months to a few years to close, depending on the size and complexity of the estate. A petition must be filed with the appropriate filing fee (currently $350 in L.A. County), notice must be published in a newspaper, a bond may have to be posted by the executor and an appraisal fee must be paid to the probate referee.

The cost of probate is set by statute and is calculated as a percentage of total assets without taking into account any encumbrances. For example, if a home worth $700,000 is part of the estate and there is a $200,000 mortgage attached to it, the fee is calculated on the full $700,000.

The current fee structure for attorneys and/or a personal representative are 4% of the first $100,000 of the estate, 3% for the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000 and 1/2% of the next $15,000,000.

Estate Value                                  Statutory Fee

$100,000                                          $3,000
$200,000                                          $7,000
$300,000                                          $9,000
$400,000                                          $11,000
$500,000                                          $13,000
$1,000,000                                       $23,000
$2,000,000                                       $33,000

If you have been named as executor or personal representative for an estate, we can provide the guidance you need to administer the estate as quickly and efficiently as possible.  We will make sure your fiduciary duties are met and all state and federal law requirements are carried out.