Many estate planning attorneys, including the experienced probate attorneys in West Palm Beach at Doane & Doane, recommend that clients do what they can to avoid probate. Why do you ask? Well, in short, probate can be expensive.
You might think that probate is absolutely necessary when someone has a last will and testament, but that is not always the case. If you are careful and sometimes creative with your estate planning, then you can keep the administration of your estate largely, or entirely, out of probate court. Those who are your beneficiaries will be thankful for such planning because the probate process can delay the time in which your beneficiaries receive their inheritance.
In this article, we are going to discuss the cost of the probate process in Florida to help you understand the kind of money that will not make it to your beneficiaries during the probate process. If, after reading this article, you have more questions about the costs of probate, we invite you to call the seasoned probate attorneys in West Palm Beach at Doane & Doane at 561-656-0200.
Workings of the Probate Court
As you likely know (particularly if you have reviewed a few of the blogs here), probate is the legal proceeding in which a court will oversee the proper administration of an estate of a person who passes away. The process is meant to do the following:
1. Determine the validity of a decedent’s last will and testament;
2. Recognize the decedent’s property that is considered a part of his or her estate;
3. Appraise certain assets in the estate, as needed;
4. Resolve the decedent’s taxes and debts owed to creditors; and
5. Distribute the decedent’s estate to the appropriate beneficiaries.
If a person dies without a will, then the court must ensure that the decedent’s assets are distributed appropriately according to the state law of intestacy.
With regard to the basic logistics of probate, the proceeding typically begins when the executor of a will presents the will to the probate court. The court’s first order of business is to determine whether the will is valid. If, however, there is no executor or no will, then the court first selects an administrator to act as executor for the estate.
Then, the probate court must oversee the payment of estate debts and taxes and will resolve disagreements between probate heirs.
The Costs Related to Probate
The probate process involves a number of fees. Those fees include:
1. Fees to the executor;
2. Accounting and appraisal fees;
3. Attorney’s fees; and
4. Court costs
The level of expense for probate normally relates to the size of the estate and the relative complexity of administering the estate. As you would expect, an estate that has only a few assets will not incur as many fees as an estate with many assets that requires significant manpower to appraise all the various facets of the estate.
Calculating Attorney’s Fees in Florida
Normally, one of the largest costs in a probate proceeding is the amount in attorney’s fees. Fortunately, there is some control over how much can be charged in attorney’s fees, directed by Florida statute.
Specifically, Section 733.6171(3) of the Florida statutes lays out what attorney’s fee are considered “presumptively reasonable” for attorney’s fees in a formal administration of the probate estate. Those fees are as follows:
- For an estate valued at $40,000 or less, the attorney’s fee is $1,500;
- For an estate valued between $40,000 and $70,000, the attorney’s fee is an additional $750;
- For an estate valued between $70,000 and $100,000, the attorney’s fee an additional $750;
- For an estate valued between $100,000 and $1 million, the attorney’s fee is 3% of the estate;
- For an estate valued between $1 million and $3 million, the attorney’s fee is 2.5% of the estate;
- For an estate valued between $3 million and $5 million, the attorney’s fee is 2% of the estate;
- For an estate valued between $5 million and $10 million, the attorney’s fee is 1.5% of the estate;
- For an estate valued over $10 million, the attorney’s fee is 1% of the estate.
So, to help understand the attorney’s fees with an example, consider a $300,000 estate. According to the information above, the presumptively reasonable fee for an attorney handling that size of an estate would be 3% of the value of the estate. 3% of $300,000 is $9,000. Thus, $9,000 would be a presumptively reasonable attorney’s fee for handling the probate estate of that size.
Florida law also provides a catch-all provision for any “extraordinary services,” that an attorney provides for personal representative administering the estate. There is no hard and fast definition of extraordinary services, but the law gives a list of factors (such as the size of the estate) that need to be considered to determine whether an attorney has provided services that are out of the ordinary.
A Word About Compensable Value
Above is a list of attorney’s fees based on the value of the estate. One thing that is important to note, the “compensable value” of the estate excludes certain things. Namely, compensable value of an estate excludes the property where the decedent resided, and a small amount of personal property. Any assets in the estate beyond the decedent’s home, or “homestead,” and personal property, are counted towards the compensable value of the estate in probate.
Let the Probate Attorneys in West Palm Beach Answer Your Probate Questions
Whether it is assistance to administer an estate, or assist an appointed personal representative, you should engage the help of the probate attorneys in West Palm Beach at Doane & Doane.
Florida fiduciaries seek the assistance of the attorneys of Doane & Doane, P.A. to administer and manage their trusts and estates frequently. The founding partners of Doane & Doane are board certified West Palm Beach Probate Attorneys. With the additional advantage of certified public accountancy in their backgrounds, they present a unique combination of skills and experience which enables them to effectively settle, administer, and manage clients’ trusts and estates.
In short, at Doane & Doane, we have the resources and experience to help you understand all aspects of the probate process. Doane & Doane’s probate attorneys in West Palm Beach can help.