It costs money to probate someone's estate. No matter the state in which the estate is being resolved, the process of probate involves a court and almost always an attorney.
The good news is there are no set costs involved in probating an estate - the final costs depend on the size of the estate, the jurisdiction in which it is probated, the type of probate administration being applied, the amount of work done by a probate attorney, the length of time the process takes, as well as many other variables. Those costs can vary widely.
In a majority of probate cases, there are few or no conflicts, few or no contesting parties, and few or no reasons for court proceedings. Most of the time, the probate process is largely clerical and the costs are minimal.
However, unless probate can be avoided altogether, there will be typical expenses for which the estate will be liable. These include personal representative fees, attorney fees, accounting and appraisal fees, and court-ordered fees. Miscellaneous fees may also apply.
Personal Representative Fees
In every state, a probate estate must have a court-appointed executor. (This person is sometimes known as a personal representative.) This individual (or sometimes a financial institution) is entitled to a commission payable from the estate as compensation for services rendered.
Personal representative fees are dictated by state law. In some states, the amount is referred to as a "reasonable fee." In other states, the fee is based on the "compensable" value of the estate, which is the inventory value of the estate assets plus any income earned during probate administration.
In Florida, for example, state statute stipulates the precise percentage a personal representative can claim based on the dollar value of the estate:
3 percent for the first $1 million
2.5 percent for all above $1 million and not exceeding $5 million
2 percent for all above $5 million and not exceeding $10 million, etc.
In addition, most states provide for more compensation for a personal representative who performs extraordinary services. Those can include: the sale of real or personal property; the carrying on of a decedent's business; the conduct of litigation on behalf of or against the estate; etc.
Lastly, a personal representative can receive a specific fee as dictated by a decedent's will, or conversely, can renounce all or part of the compensation. In fact, it's common for the executor of an estate to waive the fee, especially if he or she stands to inherit a substantial amount of the decedent's property.
Like personal representative fees, attorney fees are normally dictated by state law. They are usually only loosely defined statutorily as "reasonable compensation" for services rendered. In every case, though, an attorney can charge any amount that is agreed to by the estate's personal representative and approved by the probate court. A probate attorney can charge by the hour, charge a flat fee or charge a fee suggested by state statute.
In Florida, for example, the state's probate code suggests the following fees, based on the value of the probate estate:
Value of estate up to $40,000: $1,500
$40,000 to $70,000: $2,250
$70,000 to $100,000: $3,000
$100,000 to $1 million: $3,000, plus 3 percent of the value over $100,000
$1 million to $3 million: $30,000, plus 2.5 percent of the value over $1 million
$3 million to $5 million: $50,000, plus 2 percent of the value above $3 million
$5 million to $10 million: $90,000, plus 1.5 percent on the value above $5 million
More than $10 million: $165,000, plus 1 percent of the value above $10 million
An attorney can be compensated more for any extraordinary services, which can include: involvement in a will contest; preparation of an estate's federal estate tax return; legal advice pertaining to the carrying on of a decedent's business, etc.
Accounting and Appraisal Fees
In some cases, professional fees may be incurred for determining the value of an estate's assets and properties. For example, a complex portfolio of stocks, bonds and bank accounts owned by the decedent at the time of death may require the services of a certified public accountant to evaluate. Or a tax professional may be needed to prepare and file various state and federal tax returns.
Similarly, a professional appraiser may be needed to determine the value of real estate and personal property like jewelry, artwork, antiques, etc. This can cost a few hundred to a few thousand dollars. If the decedent had business interests, a business valuation fee can also cost several thousand dollars.
Court fees are dictated by state law and sometimes by the county where an estate is probated. They can range anywhere from a few hundred to over a thousand dollars. In cases where a formal probate procedure can be replaced by a summary proceeding, court costs can be reduced considerably.
Unless the court waives the posting of a bond, a personal representative will need to pay for and post a bond in an amount determined by a probate judge.
The bond is always reimbursable from the estate's assets upon the closing of the estate, assuming the personal representative has not engaged in any misuse of funds or behavior that goes against the benefit of the estate.
Among the typical miscellaneous expenses that can come from probating an estate include:
Postage for mail to beneficiaries, the probate court, creditors, and taxing authorities
Insuring, moving, and/or storing personal property of the decedent
Publication of a notice to creditors
County recording fees
Certified copies of affidavits, etc.