Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

August 17, 2012
What does a probate cost?

Q: I read the article about trusts, which are used to avoid probate. How much would a simple probate cost...no real estate, just cash and IRA? My son processed his divorce papers through court with all the online resources, so I'm inclined to think that person with a duplex doesn't need a trust. How many of us die in our residences? -- Linda, Folsom, CA

A: In California, no probate is necessary for estates consisting of only personal property with a total value of less than $150,000. This threshold amount excludes certain vehicles, payable-on-death accounts, and joint tenancy assets. If beneficiaries are named on your IRA, those retirement assets would not need to be probated, but would pass directly to the named beneficiaries set forth on the beneficiary form.

If a probate is opened, the personal representative and the attorney are each entitled to fees of 4% on the first $100,000 of assets (whether personal or real property assets) transferred in the probate; 2% on the next $800,000; 1% on the next $9,000,000; 0.5% on the next $15,000,000; and a reasonable amount (as determined by the court) for all amounts above $25,000,000. The personal representative and the attorney may also be entitled to "extraordinary fees" for certain other services they provide.

Additionally, certain fees are required in probates. For Sacramento County, there is a $435 filing fee, plus a $25 fee for each certified copy of the Letters of Administration for the personal representative. The personal representative must publish death notices, and this generally costs several hundred dollars. The cost varies by publisher, and each county maintains a list of approved publishers. If there were non-cash assets in the estate, California law requires the use of a probate referee to appraise those assets, and the probate referee fee is 0.001% of the value of the appraised assets, with a minimum fee of $75.

Most of us don't know when we will die, or what the circumstances will be at that time. Many people choose to create revocable living trusts to avoid probate and plan for incapacity. Since probates are public proceedings, some people prefer the privacy offered by the use of a trust; others want to avoid what they see as greater inconvenience and cost required by the probate proceeding. On the other hand, some people want the court to supervise their estate administration, or they like the creditor protection features of a probate, so they do not want to create a revocable trust.

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Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at cbuck@sacbee.com

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.



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