Probate is the court-supervised process where property is distributed from a deceased person’s estate to heirs, beneficiaries, and creditors.
Filing for probate is expensive. Heirs often can’t afford it and wonder how to pay for probate. The process can take months or even years – court and attorney’s fees quickly pile up.
If you are inheriting property, your probably asking these questions:
- How do I pay for probate?
- What are the costs to go to probate court?
- Who pays the anticipated legal expenses?
This blog address everything you need to know about how to pay for probate litigation.
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Costs To Go To Probate Court
Probate litigation is expensive. The process can cost anywhere from 3 to 8% of the estate value.
Let’s walk through the expenses before diving into methods to pay them.
Attorney’s fees are the highest probate expense.
Probate lawyers are tasked with a multitude of duties. They are responsible for filling the petition to open the estate , noticing heirs, beneficiaries, and creditors, determining the estate’s assets and debts, distributing moneys, and closing the estate.
Probate attorneys bill you one of two ways: hourly or flat fee.
Hourly fees depend on multiple criteria: complexity, area of the litigation, and attorney experience. Experienced attorneys managing complex cases charge up to $300/hour. On the other hand, lawyers charge closer to $150/hour for simple cases. Legal fees are more expensive it in large cities relative to rural areas.
Flat fee arrangements set forth the total attorney’s fees upfront. This “lump sum” payment in most cases only includes the lawyer’s fee.
No matter the financial arrangement of the attorney’s fees, make sure to get the rates in writing specifying exactly what is being covered. This helps save yourself from troubles down the road.
Court Filing Fees.
The probate filing fee is the amount you pay to the court to open the litigation.
The cost of filing fees varies from court to court. Filing fees normally range from $300 to $5,000. In most jurisdictions, the filing fee increases as the value of the estate increases.
Personal Representative Fee.
Executors or personal representatives (the administrators of the estate) are permitted to charge a fee for their labor.
The personal representative fee is often set forth via local laws. Rates typically are between $15 to $50 per hour depending on the skill and expertise of the personal representative. If the laws don’t address the personal representative fee, jurisdictions require the fee to be “reasonable”. Beneficiaries and heirs may challenge exorbitant personal representative fees.
Personal representatives are often responsible for managing funeral or burial, prepare a list of estate assets (bank accounts, personal and real property, and personal items), paying on-going taxes, and decision-making and oversight.
“Bond fees” are a payment required of the executor of the estate in order for probate litigation to proceed.
The amount is set by the judge. The purpose of the bond fee is to protect the estate from misconduct or unfair dealings. Executors are unlikely to act unethically if they are subject to lose their bond.
Real Estate Appraisals.
Real estate is the most common probate asset.
In some cases, courts require certified appraiser to assess the just market value of the property. This is particularly important when probate property must be sold to pay off creditors or the estate is to be divided among a host of beneficiaries.
The average cost of a single-family home appraisal ranges from $300 to $400, multi-family is $600, and large commercial and residential buildings increase to substantially higher ranges. Home appraisals compare the subject property to local sales, taking into consideration property condition, special features, geographic location, market conditions, and replacement costs.
Ways To Pay For Probate
Are you struggling to afford probate costs?
Wondering what options are available for financing the litigation?
There are several methods to pay for the varied probate fees – let’s dig in to each!
Distribution of Estate Proceeds. Attorneys frequently are willing to front the entirety of probate costs if they are confident they will be repaid upon closing the estate. Of course, this is a “leap of faith” on the part of the attorney that there will be moneys left over after all creditors have been paid, and so legal fees are higher in this arrangement. The attorney has incentive to pay for the probate because otherwise they will get no attorney fees whatsoever. It’s a “win win” for you and the lawyer. Paying With Your Own Cash. Although probate may costs thousands (if not tends of thousands), some may have that money available. If you’re in position to fund the probate on your own, that is most straightforward route to beginning the estate case.
Professional Cash Home Buyer. Real estate is regularly sold during the probate process. Often, the buyer will gladly front all the costs. The advantage of the buyer here is that – unless probate gets paid for – they can’t buy the house. This arrangement is also helpful for the heirs that don’t have other financial means to begin the probate process.