When an estate goes through probate in California, the money and assets a person leaves behind will inevitably pay for this court-supervised process. Unfortunately, California has one of the most expensive probate procedures in the nation, which includes administrative charges, state-mandated fees paid to the executor and/or attorneys, as well fees associated with a variety of other expenses the estate may incur. Ultimately, it’s the decadent’s estate that’s responsible for paying these fees, which can be considerable depending on the size of the estate.
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How Does Probate Work in California?
Probate is the legal process for validating a person’s will, settling debts and distributing remaining assets to beneficiaries. In California, probate can take up to 18 months or longer to complete and cost thousands of dollars in fees.
In the Golden State, probate begins when a petition is filed in the superior court where the deceased lived. This is the formal way of letting the court know that the estate needs to start the probate process. The estate’s executor or personal representative begins accounting for the deceased person’s assets, notifying any creditors and paying off debts, and finally, making sure the remaining assets go to the right beneficiaries.
Once these initial steps are completed, the executor shows their work to the court in what’s called a final accounting. After that, they can close the estate, which is like the court’s seal of approval that everything’s been done by the book.
Then again, not all estates will be subject to California’s formal probate process. Estates worth $184,500 or less can file a small estate affidavit to have assets transferred to beneficiaries without a formal probate case being opened. There are other strategies and options for avoiding probate in California, including the use of living trusts, payable on death accounts and transfer on death accounts.
Probate Fees: What Are They and Who Pays Them?
The initial step of filing a probate petition comes with a standard administrative or court filing fee, which is currently set at $435 in California. This fee lays the groundwork for the probate case to be officially considered by the court.
Subsequently, executors and attorneys are entitled to compensation for their services according to a statutory fee schedule. This fee structure is designed to be progressive, reflecting the value of the estate in question. The larger the estate, the larger the statutory fee the estate will have to pay its executor and/or attorney.
The rates for these fees, which are set by the state, are as follows:
| Value of Estate | Statutory Probate Fee |
|---|---|
| First $100,000 | 4% |
| Next $100,000 | 3% |
| Next $800,000 | 2% |
| Next $9 million | 1% |
| Next $15 million | 0.5% |
| Amounts above $25 million | Court determines fee |
In the event that the estate hires an attorney, the executor or personal representative will split this statutory fee evenly with the attorney. For example, a $1 million estate would owe $23,000 in statutory fees – half of which ($11,500) would go to the executor, with the other half ($11,500) being paid to the attorney.
Extraordinary Service Fees
However, additional fees may be incurred for what California law terms as “extraordinary services.” These are services that extend beyond the customary duties of an executor or attorney, such as managing real estate sales, resolving complex tax issues or engaging in litigation on behalf of the estate. They arise when the estate’s administration involves tasks that are not typical and therefore, cannot be covered by the standard statutory fees.
The estate is tasked with covering these fees, often necessitating the personal representative or executor to pay them upfront with the expectation of later reimbursement from the estate’s assets.
The amount of compensation for extraordinary services is not fixed but is determined on a case-by-case basis. This ensures that the compensation is commensurate with the particular challenges and intricacies of the tasks performed, upholding the principle that the services provided are as unique as the estate itself.
Bottom Line
Ultimately, it’s the estate itself – not the beneficiaries – that’s responsible for paying probate fees in California. These charges include the cost of filing the initial probate petition, fees dues to the executor and/or attorney and the cost of extra services the executor may render or arrange on behalf of the estate.
Tips for Avoiding Probate
- Be sure to add beneficiaries to your bank accounts and investment accounts. Adding payable on death or transfer on death designations to your accounts means they’ll be excluded from probate and quickly pass to your named beneficiaries.
- If you’re interested in structuring your estate so that it bypasses probate, consider speaking with a financial advisor with estate planning expertise. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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