There are two circumstances where clients normally ask me about costs involved in probating an estate. The first is obvious. After somebody passes, the probate court will appoint a personal representative. The personal representative will be responsible for estate accounting and finances. Naturally, that person asks the probate attorney how much the estate should expect to pay in expenses.
In that situation, strategies to save certain expenses are more limited. The probate lawyer can certainly advise on time and liability matters. The estate should be probated efficiently and to reduce the risk of current or future disputes. That can be a large time and money saver. But my point is that the composition of the estate will not substantially change. In other words, the assets of the estate are certain and probate must move forward.
The second circumstance where I get that question provides more tactical possibilities. It is when estate planning is underway and the estate planning attorney and client are organizing affairs. The client wants to know what will happen with his or her estate on a practical level. What are the costs of probate and can they be reduced or avoided? There are endless paths to take here. Besides the basic documents like wills and trusts, assets can be restructured or retitled.
Whatever the setting, this article discusses some of the basic costs involved with administration of an estate in South Carolina probate courts.
This is the fee a probate court will charge based on the value of the estate. It is not significant and is almost never a reason by itself to alter an estate plan. The smallest of estates might expect to pay in the neighborhood of $25. A more moderate estate is in the hundreds of dollars with very large estates reaching the thousands. It is a progressive system in that the fee any estate pays is calculated to its exact dollar value.
There are other administrative costs in the probate court for copies and postage. Certain filings will carry a separate filing fee.
Time and Time Value of Money
This might be the largest cost to the personal representative. Estate administration usually takes a year and sometimes stretches much longer. Throughout the process, there are time-intensive duties. Not to be forgotten is the inheritance that will ultimately be received. If assets are tied up in the probate court, time value of money is lost.
Final income taxes of the decedent are the responsibility of the personal representative. Many estates that earn income also pay estate income tax. Estate taxes are beyond the scope of this article.
Family Strife and the Cost of Disagreement
This one is hard to quantify. I see family members that disagree on probate issues regularly. It’s safe to assume that this is the last thing the decedent would have wanted. This cost can be as heavy as any monetary sum.
Probate avoidance is a common goal in estate planning. The costs can accumulate but the time and possibility of dispute are the reasons many estate planners want to stay out of the probate court. Estate planning attorneys and probate lawyers can be an invaluable resource.