You did the right thing for your family. You sat down and drew up a will. Maybe you saw the WillMaker program on sale at Costco, or maybe you said, “I drew up my will 30 years ago and like it the way it is, and I don’t need to pay no stinkin’ lawyer to do it again! My Ben Franklins are gonna stay in my pocket and ain’t going to that lawyer!” After all, you named your executors in your will, listed your spouse and kids as beneficiaries, and said who gets what. So why do you need to change anything? Well, you forgot to tell everyone that you own your home outright, and you also forgot to mention those three rental properties. All said and done, you own $1 million dollars’ worth of real estate.

Now for those who may not know about wills and probate, in order for gifts in a will to be valid, generally court orders have to be drawn up to confirm the will is valid and allow the distribution of those gifts. Yes, there are a few exceptions to the rule such as payable on death accounts, titling of properties in a joint tenancy, and the new payable on death deeds. But long story short, if you have to go through probate court, you have made attorneys like me a beneficiary of your estate. But Rob, you say, you are nowhere in my will; how can you be a beneficiary? Well, I don’t need to be. Probate Code Section 10800 makes attorneys like me a beneficiary by charging you a commission for probating your estate based on the gross value of assets in your estate. The calculation of the value of your estate does not factor in loans or debts against the estate.

Here is the commission scale:

  •  4% on the first $100,000 or fraction thereof;
  •  3% on the next $100,000 or fraction thereof;
  •  2% on the next $800,000 or fraction thereof;
  •  1% on the next $9,000,000 or fraction thereof;
  •  ½ of 1% on the next $15,000,000; and
  •  a reasonable fee on any excess over $25,000,000

So let’s take our million-dollar estate mentioned above. Based on the commission scale, you just gave me $23,000!

The moral of the story is this: Some good planning and a little bit of effort could help prevent your family from spending unnecessary money on the back end of things. Creating a revocable living trust, for example, can avoid many of the probate pitfalls and also give you the flexibility to tailor things to your needs as time goes on. Although living trusts do cost a little bit more to set up on the front end, the attorney’s fees on a trust administration once a death occurs are generally significantly cheaper. That’s because a typical administration does not involve any court interaction and is not subject to the probate commission scale mentioned above. Your wishes can be carried out with ease.