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House appreciation and probate costs


Many people are unsure and unaware how attorney fees and court costs work in a California probate case.  With amazing house appreciation the last 10 years I wanted to talk a little bit about how house appreciation and probate costs work.

This came to mind as I am working on a new matter where the decedent bought her home in Stockton in 2011 for $68,000.  Yes, under $70,000 for a nice little house in Stockton. You might recall that Stockton, the heart of San Joaquin county, was devastated by the Great Recession and housing prices fell further than just about any place in the country. Well, what goes up must come down and what goes down… and I mean way down… must (eventually) come back up!

Zillow shows this property at $325,000 today.  Yes, 11 years later the value has changed from under $70k to over $300k.  I believe the word you are looking for is… WOW!

Attorney fees, and part of the court costs, are affected by the value of the house. Let’s explore this.

First of all we always look to the home value because California has small estate procedures. The current threshold, in most cases, is $184,500.  Well, at first blush I was thinking this MIGHT just creep under that $184,500.  I had not looked at Zillow yet and the potential client told me what mom had paid for the house.  Heck thinking it doubled in 10 years would have been pretty great, right!?  However, mom also had a bank account and thus the total assets would almost certainly be over $184,500.

Then I looked at Zillow and that blew everything out of the water!  Instead of considering a small estate probate we are now looking at the full, or standard, probate. If fees are based on the value of the assets what value is used?

  • The purchase price?
  • The property tax assessed value?
  • The current value?
  • Or something else?

It’s actually the last choice… something else… generally.  In a case where the house is to be retained the valuation is the date of death value as determined by the California probate referee.  The probate referee is a state appointed official so it’s a pretty true, and accurate, number. There is not much room for bias or fraud to step in.  You can provide information and/or photos to the probate referee to help them determine the most fair and accurate date of death value.

In cases where the property will be sold during probate the fees are based on the sale price – it might be higher than the probate referee’s appraisal and might be lower but whatever it is that’s the number used for attorney fee calculation.

The main cost that is dependant on the value is the probate referee’s fee which is 1/2 of 1% of the value… that they assess.  Some would say they may be bias to aim high but that is not been my experience. They tend to be very fair minded.

If you have a situation with a house that has appreciated significantly and you are concerned about how probate will work, or what it might cost, please reach out to me to discuss.  -John

The post House appreciation and probate costs appeared first on Probate Sacramento CA | Trusted Probate and Estate Attorney.



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