Probate

Probate is the process where the State acknowledges a person’s death and appoints an individual with the power to collect the decedent’s assets, pay creditors, and distribute the remainder to the heirs. If the decedent had a will, the will must be filed with the court. If the decedent did not have a will, the court will appoint an administrator of the estate.

 It is important to be aware that when real estate is owned in more than one state, your loved ones will need to open up an ancillary probate proceeding in each state where you own real estate. This often involves several attorneys, each of whom will charge their hourly fee. In New Jersey, probate attorney’s fees are paid out of the estate. There is no statutory formula for calculating probate attorney’s fees in New Jersey. Instead, the fees must be reasonable based on a number of factors determined by the court.

 In Florida, probate can be shockingly expensive. The following fee structure is set forth by statute:

• For estates of $40,000 or less: $1,500
• For estates between $40,000 and $70,000: $750
• For estates between $70,000 and $100,000: $750
• For estates between $100,000 and $900,000: 3%
• For estates between $1 million and $3 million: 2.5%
• For estates between $3 million and $5 million: 2%
• For estates between $5 million and $10 million: 1.5%
• For estates of $10 million and above: 1%

For example, if your executor is probating your estate worth $1.5 million, here’s how the probate attorney’s fees are calculated:

 The first $100,000 = $3,000 ($1,500 + $750 + $750)

The next $900,000 = $27,000 ($900,000 x 0.03)

The remaining $500,000 = $12,500 ($500,000 x 0.025)

Total = $42,500

If you own a second home in Florida, it is important for you to be educated about these fees. If you die while owning real estate in Florida, your Florida property will be subject to these fees. By planning ahead, you can consolidate your out-of-state property into a trust.