Probate is a court process by which, at your death, your will is validated, your death expenses are paid (medical bills, funeral home fees, etc.) and your assets are distributed according to the terms of your will. The problem is that probate can cost your estate thousands, or even tens of thousands, of dollars. It also takes approximately 1 ½ years to get through the Probate process.
When does an estate have to go through Probate: In Illinois if you have $100,000 or more of assets passing under your will, your estate automatically must go through Probate. Does anyone have a home worth less than $100,000? So, if the only asset passing under your will is your home, it will trigger Probate.
How is Probate paid for: Since Probate is a complicated legal process, most people hire a lawyer to take their estate through Probate. The first thing the lawyer does is draft the documents necessary to open the Probate estate. He then files them with the court. The court fees for filing the Probate estate and publishing in the newspaper that the estate is now open costs about $500. But that is peanuts compared to what the lawyer will charge. There are two basic ways a lawyer will charge to take an estate through probate:
First is the percent approach. In Chicago and surrounding suburbs, most lawyers charge between 5-10% of the gross value of the assets passing under the will. So, for example, if a person has a home worth $250,000 and a bank account worth $50,000 passing under the will, the fee would be between $15,000 and $30,000 ($300,000 x 5% or 10%).
Second is the fee approach. Most lawyers charge between $200 and $400 an hour. On average, it takes about 40 hours to settle an estate. So, the fee would be between $8,000 and $16,000. But when one thinks about Probate, they need to think into the future. Do you plan to die this year? Probably not. What if you (or your surviving spouse) die 15 years from now and lawyer fees have doubled? Then it could cost $16,000 to $32,000. What if you (or your surviving spouse) die 30 years from now? The fee could then be upwards of $50,000. I have had clients tell me this is what they paid for Probate.