The REAL COST of Probate in Your Estate Plan
Probate – The administration of an estate of a deceased person and governed under the State Probate Act. Probate is handled by the court system in the state of Illinois. As it is a legal matter concerning the disposition of your estate, taking probate into consideration when doing any estate planning is important.
How Long is the Probate Process?
Probate under the best case takes at least nine months:
- A month to get the probate estate open
- A month to send out and have published the required notices
- Six months for any / all claims to made against the estate
- One month to close the estate
In reality, it generally takes longer than nine months. Every probate is unique, having unique situations, assets, creditors, and heirs.
Some estates can be processed and closed in less than a year, but other estates may take as many as five (5) years or more. According to market research, however, the average time to settle all estates is 16 months.
The Size of the Estate Matters
Settling estates of $2,000,000 or more is about two-and-a-half or three times longer than smaller estates
- Estate value below $10,000 about 6 months
- Estate value below $100,000 1 year
- Estate value below $1,000,000 18 months
- Esates over $5,000,000 2+ Years
How much will the estate administration cost?
The cost, like time, is variable based on many factors including size, complexity, and the planning for probate that went into the estate planning. Costs include professional fees (legal and accounting), court costs, other administrative costs and fees, and the cost of the executor.
Professional Legal & Accounting Fees
The median cost of legal fees for estates under $500,000 is about $4,000. This includes legal and accounting fees. (This is a nationwide average. The median cost for legal fees in your state and your local court system may not align with the national median.)
Interestingly, the average cost of settling an estate under $10,000 is over $2,000. How can that be? (You might be wondering). Likely, small estates like that also have debt and many issues that were not addressed during life. I can attest to the fact that a tremendous amount of time can be spent trying to handle all the issues in a small and very poorly planned estate.
Not surprisingly, then, estates between $100,000 and $500,000 typically incur fewer professional fees than estates over $500,000. The average cost of professional fees for those estates is $6,000 to $12,500.
This comports with what I often tell my clients: there is a certain minimum amount of work that has to be done, regardless of the value of the estate. The professional fees do not deviate much between small estates and estates up to $500,000, but estates over $500,000, on average, incur slightly more fees ($12,500). Estates over $1,000,000 average $17,000 in legal fees, and estates over $5,000,000 average $33,000 in legal fees.
What is reasonable compensation for an executor?
In Illinois, executor compensation is purely a function of the value of the work that is provided. Factors that apply in determining value include:
- The amount of time required to probate the estate
- The complexity of the issues involved in closing the probate
- Special skills, training, and expertise of the executor required to close the estate
There is a certain minimum amount of work that needs to be done for any estate. The national figures for executor compensation range from about $13,000 up to about $23,500. (In Illinois, executors get reimbursed hourly, ranging from $35/hr to $100/hr with the average being $65/hr.)
The Executors’ Time Involved in Probate
Executors are compensated for their time. The average number of hours an executor spends on the administration of an estate nationwide is 570 hours (the 16-month average). In most estates, an executor will spend between 500 and 700 hours settling the affairs of the estate. The more attention one gives to the probate process while estate planning will greatly impact the amount of time to administer the estate and reduce the amount of time needed to close the estate lowering the future cost of the probate.
The cost of setting up an estate to avoid probate may be greater than the cost of doing a simple Will, but the cost of probate is far greater than the cost of estate planning to avoid probate. The cost of not doing any planning, or planning poorly, is greater still. For these reasons, you should do the planning with a reputable estate planning attorney necessary to avoid probate.
Contact Christopher S. Nudo, Attorney at Law
When planning your estate, you need an estate planning attorney with decades of experience up his sleeve. Christopher has the experience and together we will examine your assets thoroughly and come up with a strategy to reduce or eliminate most of the costs associated with probate. Call (847)-737-1800 to schedule an in-depth consultation reviewing your estate planning needs.
The statistics in this article reflect our law firm's experience earned over decades of representing clients in probate. Additional estate settlement statistics can be found at EstateExec.com
