Calculating Statutory Fees for the Petition

As an estate planning attorney and CPA with over 35 years of experience here in Escondido, I’ve seen firsthand how easily a seemingly straightforward probate can become bogged down in unexpected costs. I recently had a client, David, who meticulously prepared his initial probate petition, but overlooked a critical detail: the accurate calculation of statutory fees. He assumed a flat rate, and was shocked when the court demanded a significantly higher amount, delaying the process and causing considerable stress. This miscalculation ultimately cost him thousands of dollars in legal fees just to correct the issue. It’s a surprisingly common problem, so let’s break down how to calculate these fees correctly.

What Assets are Included in the Fee Calculation?

Many executors assume fees are calculated solely on the “net” value of the estate—what’s left after debts and mortgages are paid. This is a dangerous misconception. Probate Code § 10800 states that fees are not calculated on the ‘net’ value (equity), but on the ‘estate accounted for’ (gross value of assets + gains – losses). A house worth $1M with a $900k mortgage still generates fees based on the full $1M value. This means the gross value of all assets subject to probate—real estate, bank accounts, investment accounts, vehicles, and personal property—are included in the calculation. It’s crucial to have an accurate appraisal of all assets as of the date of death to avoid underestimation and subsequent headaches. Remember, even assets with beneficiary designations (like life insurance or retirement accounts) are initially included in the gross estate value for fee calculation purposes, even if they bypass probate.

Understanding the Statutory Fee Schedule

California Probate Code establishes a sliding scale for statutory executor and attorney fees. The scale is based on the value of the estate and is calculated as follows:

4% of the first $100,000 of the estate
3% of the next $100,000
2% of the next $100,000
1% of the next $100,000
0.5% of the remaining estate value

For example, an estate valued at $500,000 would be calculated as:

4% of $100,000 = $4,000
3% of $100,000 = $3,000
2% of $100,000 = $2,000
1% of $100,000 = $1,000
0.5% of $200,000 = $1,000

Total fees would be $11,000.

The CPA Advantage: Stepping Up Basis & Valuation

As a CPA as well as an attorney, I often bring a unique perspective to probate cases. One of the most significant benefits I can provide is a thorough understanding of “step-up in basis.” Properly valuing assets at the date of death isn’t just about calculating probate fees; it directly impacts potential capital gains taxes for the beneficiaries when they eventually sell those assets. For example, if David inherited a stock with a low original cost basis, the step-up in basis to the fair market value on the date of death can drastically reduce the capital gains tax liability. I can ensure that the estate’s assets are accurately valued for both probate purposes and tax planning, maximizing the benefit for the heirs.

What About Reimbursement for Expenses?

In addition to statutory fees, executors are entitled to reimbursement for reasonable expenses incurred during the administration of the estate. These expenses can include appraisal fees, court filing fees, advertising costs for creditors’ claims, and even mileage for estate-related errands. It’s crucial to keep meticulous records of all expenses, as the court will require detailed documentation.

Avoiding Common Mistakes and the Importance of a Status Report

One of the biggest errors I see is failing to account for all assets or using outdated valuations. Always use the date of death value. Another critical mistake is neglecting to file a Status Report if the estate isn’t closed within a reasonable timeframe. Probate Code § 12220 states that if the estate is not closed within 12 months (or 18 months if a federal tax return is involved), the executor must file a Status Report explaining the delay. Failure to do so can result in a reduction of the executor’s statutory fees. A proactive approach and careful attention to detail are essential to avoid costly mistakes and ensure a smooth probate process.

What failures trigger contested proceedings and court intervention in California probate administration?

The path through California probate is rarely a straight line; it requires precise adherence to statutory deadlines, accurate asset characterization, and strict fiduciary compliance. Without a clear roadmap, what begins as a standard administrative proceeding can quickly dissolve into a costly battle over interpretation, valuation, and beneficiary rights.

To manage the estate’s value, separate property types by learning what counts as a probate asset, confirm exclusions through assets that bypass probate, and support valuation steps with probate inventory requirements to reduce disagreements about what is in the estate.

A stable probate administration outcome usually follows from clarity, consistency, and readiness for court review, especially when multiple stakeholders and competing interpretations are involved. When documentation supports enforcement and timelines are respected, families are less likely to face preventable escalation.

Verified Authority on Closing a California Estate

• Petition for Final Distribution: California Probate Code § 11600
  This is the “finish line” document. It tells the court what bills have been paid, what assets remain, and exactly who gets what according to the Will or intestacy laws. The court must approve this petition before a single dollar is distributed to heirs.
• Waiver of Account: California Probate Code § 10954 (Waiver)
  A powerful tool for speeding up the closing process. If all beneficiaries are competent adults and agree in writing, the executor can skip the detailed (and costly) formal financial accounting. This often saves the estate thousands of dollars in legal and accounting fees.
• Executor & Attorney Fees: California Probate Code § 10810 (Attorney Compensation)
  Just like the executor, the probate attorney is entitled to statutory fees set by law, not by hourly billing. These fees are requested in the final petition and are paid only after the judge signs the final order.
• Receipt on Distribution: California Probate Code § 11751
  Proof is required. After the judge orders distribution, the executor must deliver the assets and obtain a signed Receipt of Distribution from every beneficiary. These receipts must be filed with the court to prove the judge’s order was followed.
• Final Discharge: Judicial Council Form DE-295 (Ex Parte Petition for Final Discharge)
  The final step often forgotten. Once all receipts are filed, the executor must file this form to be “discharged.” This order formally relieves the executor of their duties and cancels the bond, ending their legal liability.
• Tax Clearance: Franchise Tax Board (Estates & Trusts)
  Before closing, the executor must ensure all personal income taxes of the decedent and fiduciary income taxes of the estate are paid. While a formal tax clearance certificate is not always required for smaller estates, personal liability for unpaid taxes remains a risk for the executor.