The estate of a person is subject to probate when the total value of his or her probate assets are over $150,000. This means that if the total value of the person's assets are $150,000 his or her assets will likely be probated regardless of whether or not the person owes anything on it. For instance, if a person owns a piece of real estate worth $300,000, the probate value of that asset is $300,000. This is true, even if the property is mostly mortgaged.
One of the reasons that people do estate planning is the avoid probate costs and delays. With probate costs being as high as they are, this idea makes sense. In California, the maximum attorney fees for probate are determined by the law. Accordingly, the attorney, and the personal representative (executor or administrator) of the person who passed away are each entitled to compensation based on the value of the estate. For ordinary services, these fees are currently 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000, and 1% of the next $9,000,000. In addition, there are extraordinary fees, court fees, executor fees, and many other fees and costs to consider. When you add that to the court related delays and stress, it is no wonder that many are motivated to use estate planning tools to avoid this headache.
For example, if the estate of a person who passed on is worth $400,000. The statutory probate fees for the attorney or personal representative would be $9,000 each. If you add to that the money that needs to be spent on all the related costs as well as the long time that it takes to go through the probate process you will see why this option might not be the best situation for many people who want to leave a legacy for their loved ones.
Although there are times when probating an estate might be desirable, for many people, avoiding the cost and delays of probate is the more sensible option. And there are, in fact many ways of doing so. A good estate plan can help a person in many different ways in addition to probate avoidance. As far as probate is concerned, however, a will alone will not do. A trust, however, can be used to protect a person’s assets from going into probate. A good estate plan can be essential not only in saving time, and money, but most importantly it can bring peace and predictability to a person’s loved ones when they need it the most.
This information is for educational use only and should not be construed as legal advice. Haleh Razzaghi is an estate planning, business, and intellectual property attorney in San Diego, California. You may contact her by emailing her at email@example.com or calling (858)367-9876. For more information please see http://www.razzaghilaw.com/.