Mortgages and Probate Fees

Mortgages and Probate Fees

Effective 28 March 2013, the amount of indebtedness of real property included in a decedent’s estate (i.e., a mortgage balance) will be deducted from the value of the real property when calculating the probate court’s estate administration fee. This means that personal representatives will have to pay less money to the county and state. To calculate the amount of the probate court’s administrative fee, look here: http://legislature.mi.gov/documents/2011-2012/publicact/pdf/2012-PA-0596.pdf.

As an example, if your estate is worth $100,000, your personal representative will pay $362.50 (about half to the county and half to the state). If you have an estate worth $500,000, your personal representative will pay $862.50. Other costs of the probate process include $150 for filing for a probate estate and $50 for publishing notice to creditors. Moreover, these fees are due and payable to the probate court on or before the closing of the estate or within one year after the commencement of probate proceedings, whichever occurs first.

These fees should be considered when planning your estate. Putting assets into a trust will help you avoid this administration fee, and upon death, the assets will automatically transfer to the beneficiaries according to the trust terms without having to go through probate for several months. Call me if you have any questions about writing a will or creating a trust.

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