If you are privileged enough to own a home, you already know the benefits that come with it. Whether from an investment standpoint, or an emotional one, the home is at the top. But, the privilege of owning a home comes with many significant costs. One example that often hits home is homeowner’s insurance, an expense that has many people boiling over in anger (and in some cases moving away). But while the cost of homeowner’s insurance has gained major attention, it is dwarfed by the very high cost of transferring the home at death when going through probate. Probate is usually necessary to transfer your home if you don’t have a living trust.
It is no secret that home values in Placer County, Nevada County, and El Dorado County are high. During life, no one complains about having a sky-high home value. But consider this: that sky-high value during life means a sky-high expense at death. Probate costs tens of thousands of dollars, and that money comes right out of your legacy estate. Why does it cost so much? Attorneys and personal representatives are paid a percentage of the gross value of what your home is worth (and any other assets going through probate). Mortgages are not considered. (The personal representative is the person who hires the attorney and seeks the attorney’s guidance)
What does that mean? It means a lot of money is wasted! Take a look at the following average home value and the cost to transfer the property at death by county:
Placer County Home Value: $630,000:
Attorney Fee: $15,600 Personal representative fee: $15,600 Total: $31,200
Nevada County Value: $620,000
Attorney Fee: $15,400 Personal representative fee: $15,400 Total: $30,800
El Dorado County Value: $620,000
Attorney Fee: $15,400 Personal representative fee: $15,400 Total: $30,800
Do you live in Loomis or Newcastle? Expect the cost to be even more.
Newcastle Home Value: $858,000
Attorney Fee: $20,160 Personal representative fee: $20,160 Total: $40,320
Loomis Home Value: $814,000
Attorney Fee: $19,280 Personal representative fee: $19,280 Total: $38,560
Ouch. If you live in Colfax, where home values average $479,000, you can still expect the fees to be $25,160. Those are just the standard numbers for one residence. The numbers go up fast if rental properties and bank accounts are considered.
And those are just the attorney fees. Consider also that court fees and other costs nearly always add up to $2,000-3,000 for probate.
So, if you own a home that is the average value of a property in Placer County, you can expect costs to transfer the house to be nearly $35,000. To transfer title to your children!
Easily avoid those costs by investing in an estate plan.
The information in this blog is intended only as general information, and under no circumstances constitutes legal advice, nor does it create an attorney-client relationship. The information should not be relied upon as a substitute for specific legal advice concerning your particular situation.
For advice specific to your situation, contact us to schedule an appointment.
About the Koons & Riswold Law Office
Koons & Riswold maintains an office in Davis, CA and Auburn, CA to provide clients with legal services in Auburn, Davis, and the surrounding areas. Our Auburn and Davis lawyers provide legal services, which include: Living Trust and Estate Planning services, Probate, Elder Planning, and Trust and Estate Administration. Our lawyers have deep roots in Northern California, having strong familial, community, and professional ties to the region.
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