In the event a person fails to create an estate plan or leave money and/or assets outside of a Revocable Living Trust then that individual’s family members could be faced with probating his estate. The cost of probate largely depends on the time involved and how complex the estate’s finances are. If the decedent did not leave a will, did not organize their finances, or if their financial affairs were left in disarray, it can take a some time to sort through their files, pay off any financial obligations such as debts, and taxes. As a general rule of thumb the more valuable an estate is, the more probate is going to cost.
Filing tax returns, debt disputes, any pending or actual lawsuits against the estate, heirs who cannot be located, and challenges to a will are all situations that can cause costly delays; thereby making probate costs go up.
There are other factors that will affect probate time-frames and are state mandated. Each state has individual and specific laws on probate, in terms of when documents have to be filed and the procedures surrounding probate. Smaller estates generally have what is called summary procedures which take a lot less time in comparison to regular probate procedures. As a result, summary procedures are generally a lot less expensive. To that end, summary procedures can last anywhere from three to six months. Regular probate procedures can last up to several years.
In terms of a hard and fast number, that will vary by state law and sometimes even by jurisdiction. Essentially, the cost of probate will varies, thus the application of an actual number can not be easily provided. However, on average, probate can sometimes cost petitioners anywhere from 3-7 % of the total value of the state, sometimes even more. These costs associated with probate an include, court fees, appraisal costs, attorney fees, surety bond (a type of insurance), and accounting fees. Some fees, like the court costs (which can range from hundreds to thousands of dollars), attorney’s fees, and personal representative are mandated by law and as such can not be bypassed. Other fees, of course, may be negotiable (e.g. appraisal fees, accounting fees, etc.).
Again, costs of probate depends largely on the value of the estate, whether the decedent had a Revocable Living Trust, or how disorganized the deceased person’s financial affairs are. This does not take into account the income taxes and estate taxes that are due at the conclusion of the probate administration.