If a loved one has passed away, you might be facing the prospect of probate. This legal process is not quick or inexpensive. To get a better idea of what to expect in terms of the financial outlay, read on.
A real estate appraisal – In some cases, the probate court will require a professional real estate appraisal of any property that is probated. Appraisals can cost several hundred dollars and they may also add time to the probate process. In some states, real estate and other appraisals are governed by several provisions limiting how much the estate can be charged. Speak to your probate lawyer to find out more.
You can keep the real estate out of probate entirely and avoid appraisals using a special type of deed. This deed is known by various names, and it rolls the home over to anyone else named on the deed without any probate necessary.
Tax concerns – Only very large estates are subject to estate taxes. If your loved one's estate is large, speak to an accountant for help. When it comes to the beneficiaries, a large portion of inherited property is free of taxes. Speak to a financial expert, however, for specific information.
Another tax issue is the filing of the final tax return and the payment of any taxes owed. In most cases, probate cannot be closed until the IRS and local tax authorities are satisfied.
Personal representatives – The person (or persons) responsible for dealing with the estate may be paid a certain percentage of the value of the estate. Some are family members who are inheriting property and may forego the fee. However, if you use someone outside the family, they are likely entitled to payment from the estate.
Real estate sales – In many cases, real estate in probate can be readied for a sale and can be sold in some states. The cost of preparing a home to be sold can be an estate expense. For example, if you need to do any of the following, expect some expenses.
- Rent a storage room.
- Hire someone to pack the home up.
- Use an estate sales agent.
- Make repairs to the home to get it ready to sell.
Legal fees – The filing of probate paperwork may be a fixed expense, or it could be based on the value of the property. The money is paid to the probate lawyer, and they pay the county probate court. As for the probate lawyer's fees, the fees are usually stated when the contract for representation is signed. This is an estate expense but loved ones may bear the responsibility if the estate is small.
Speak to a probate law firm to find out more.