Probate is a legal process that is intended to facilitate the proper distribution of a deceased person’s assets. The process begins with the executor (someone appointed by the testator in the will) depositing the person’s will with a probate court.
The Purpose of Probating a will:
A will is probated to determine basic things about the testator’s (a person who makes the will) assets and their distribution. The process is intended to:
- Verify the validity of a will
- Identify the assets and have them appraised
- Pay the testator’s remaining debts and taxes, if any
- Distribute the assets among the proper beneficiaries named in the will
Many people find it quite intimidating to probate a will because they are afraid of the cost that the process will incur. In most cases, clients don’t have any idea about the amount they might end up owing.
This blog explains the entire probate process and unravel the mystery that surrounds the cost of probating a will.
Probate Court Fees:
The average cost to probate a will in Texas is lower as compared to other states in the U.S. This is because Texas allows independent administration, where an administrator files inventory of the estate and identifies the people owning the estate.
Independent administration is faster and cheaper because the estate is administered without the approval of the probate court. Additionally, the executor doesn’t need to post a bond or wait for the court’s permission during the administration.
On the contrary, dependent administration requires the identification and dissemination of the deceased person’s assets. These estate cases require constant court monitoring, which makes the process lengthier and costlier.
Below is the breakdown of the various costs that may quickly add up when probating a will Texas.
1- Attorney’s fees:
An obvious fee involved in probating a will is the attorney’s fee. They are calculated based on the amount of time a lawyer has to take on a case. Most lawyers charge for probate work in two main ways.
- Hourly fee: The most common method for lawyers to charge clients for probate work is to bill them by the hour. The hourly rates are usually dictated by state law, and they vary depending on the place where you live. Attorney’s fee in Texas ranges between $150 to $400 per hour based on the lawyer’s experience.
- Flat fee: Some lawyers also charge a flat fee for probate cases. Experienced lawyers know how long a case may take, and hence, they may quote a lump sum that will be close to what they’d get in case they billed by the hour. Attorneys usually feel more comfortable with this billing method because they don’t have to keep a record of the time they spend on a case.
Lawyers in some states are also authorized to collect a percentage of estate’ value as their fee. However, in Texas, they can only charge a flat fee or bill by the hour. In dependent administrations, the court audits the lawyer’s invoices and pay them accordingly.
2- Executor’s fees:
The executor’s fees are also determined by state law. The fees can either be a fixed amount or a reasonable percentage of the value of the estate. In Texas, the executor is also legally entitled to a 5 percent commission of all amounts that he/she receives or pays out in the administration of the property.
Furthermore, executors can also ask for additional fees for services that go above and beyond the basic probate work.
3- Accounting Fees:
Accounting fees in Texas vary depending on the value of the estate and the assets owned. There can be additional fees in case the estate has complex private investments.
Although Texas doesn’t have any estate or inheritance taxes, the federal tax may apply if the estate’s value is higher than the federal estate tax exemption limit of $11.4 million. In such cases, the accounting fees will have to include the filing and preparation of tax returns.
The appraisal fee will be there to determine the value of assets, including real estate, jewelry, artwork, antiques, vehicles, and business interests. Private businesses might require more effort to appraise and will be more challenging to deal with in tex work.
These are additional fees that many people overlook in probate cases. They can range from postage fees to storage and shipping fees. They could add up to 3 to 5 percent of the estate value.
The cost of probating a will in Texas varies depending on the complexity of the estate, the number of creditors, and disputes among beneficiaries.
Most of the costs and fees can be escaped if the estate has a value lower than a certain threshold. However, in most cases, the beneficiaries will give up to 8 percent of the estate’s value in probate costs.