03 Oct Everyone says probate is easy and cheap. But what does it really cost?

Q. The statement is made that probate in New Jersey is relatively simple and inexpensive. But no one puts real numbers or estimates on probate cost. Is it based on the total estate value? Is it a percentage of that estate value? Or what?
— Trying to understand

A. It’s a good question.

If you mean probate literally, then it is, in fact, quite inexpensive and simple in New Jersey.

Costs can vary slightly, but generally, probating a will costs $100 for the first two pages and $5 for each additional page, said Tom Szieber, a trusts and estates attorney at Chiesa Shahinian & Giantomasi in West Orange.

Additional costs can arise due to requests for extra Executor’s Short Certificates, filing disclaimers, the presence of co-executors, the need for exemplified copies of the will, trustee certificates for testamentary trusts, probating a codicil and a host of other reasons, he said.

You can look to your county surrogate for some more details.

Szieber said the Ocean County Surrogate Court’s website provides a particularly useful and comprehensive list of probate and related fees.

Other counties may have negligibly different pricing, but such differences are not significant, he said.

“Intestate administrations — where the decedent dies without a will — are slightly more expensive, with application fees often starting at around $125,” he said. “Intestate estates may incur an additional cost if the administrator is required to post a bond with the surrogate’s court.”

Given that executors are required to send notices of probate to all next-of-kin and the beneficiaries under the will after probate is complete, and file an affidavit of mailing with the surrogate’s office stating that the required notices were sent, there will be another $5 per page fee incurred for the filing, he said.

If, however, your question is actually intending to ask about the cost of administering an entire estate — rather than the cost of the initial probate proceeding only — then the answer is far less definitive, Szieber said.

“Estate administrations can be, and often are, quite simple and relatively inexpensive where the family involved is relatively harmonious, there is no associated litigation and there are no unusual complexities,” he said. “However, families with more discord may cause greater expenses for the estate, as the executor will want to take more detailed measures to reduce the estate’s liability and wield off challenges and/or objections to both his or her fiduciary decision-making or the validity of the will itself.”

Depending on the size of the estate, there could be large fees associated with the preparation of tax returns, he said.

Income tax returns for both the decedent and the estate are relatively inexpensive, but estate tax returns (IRS Form 706), gift tax returns (IRS Form 709) and New Jersey inheritance tax returns (NJ Form IT-R) are complex and will usually require the services of an experienced attorney or accountant, he said.

If needed, formal judicial accountings, or even more complicated informal accountings, can also be expensive, he said. Other professional fees, such as appraisal fees and commissions for real estate agents, may be necessary to effectuate the proper disposal of the estate’s assets.

He noted that executor and trustee commissions are generally permitted as well, as long as the will or trust agreement does not direct that no commissions be paid. Executors and trustees may choose to take all of the commissions to which they are entitled, some of the commissions or none of the commissions, he said.

“Given the myriad of possible fact patterns involved for a particular administration, it is impossible to put a number on what a given administration will cost without additional information,” Szieber said. “Even then, unforeseen issues can, and sometimes do, arise, making it difficult to approximate the total cost.”

Both the initial probate filing and general administration costs are generally not based on the estate’s value, he said. Of course, there are several exceptions or caveats.

For example, Szieber said, estates exceeding the federal estate tax exemption — $12.060 million for 2022 — will incur tax liability on assets above the exemption that pass to individuals other than a spouse. Similarly, estates that include distributions to individuals or entities other than spouses, descendants, ancestors and qualified charities will be subject to New Jersey inheritance tax, he said.

“New Jersey law provides a simplified procedure for handling `small estates’ — defined by the statute as an estate where there is no will and the total value of the assets in the decedent’s name with no co-owner or designated beneficiary is $50,000 or less for surviving spouses and $20,000 or less for other heirs — and such estates are typically less costly to administer,” he said.

Finally, while some attorneys charge executors a legal fee that is equal to a percentage of the estate’s value, this type of arrangement is not commonplace and could result in an executor paying more than necessary for legal counsel, he said.

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This story was originally published on Oct. 3, 2022.

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