Understanding the Cost of Probating an Estate in Maryland

Probating an estate can be a complex and sometimes costly process, especially for those unfamiliar with the legalities involved.  In the State of Maryland, navigating through probate procedures requires a clear understanding of the associated expenses.  From court fees to attorney charges, the costs can quickly add up, impacting the distribution of assets and potentially delaying the resolution of the estate.  In this blog post, we'll discuss the intricacies of probate costs in Maryland, shedding light on what individuals can expect when going through this legal process.

Understanding Probate in Maryland

Before getting into the costs, it's essential to grasp the basics of probate in Maryland.  Probate is the legal process through which a deceased person's assets are distributed to beneficiaries and heirs, and debts are paid off.  The process is overseen by the Orphans' Court in Maryland, which ensures that the deceased's wishes, as outlined in their will, are carried out appropriately.  If there is no will, distribution will be guided by the applicable laws of the State of Maryland

Types of Probate Proceedings

In Maryland, there are primarily two types of probate proceedings: administrative probate and judicial probate.  Administrative probate is a simplified process available for small estates, while judicial probate involves more extensive court supervision and is necessary for larger or more complex estates.

Cost Components of Probating an Estate in Maryland

1. Court Fees

Filing fees are an unavoidable cost associated with probate in Maryland.  The fees vary depending on the type of probate proceedings and the size of the estate.  Generally, larger estates incur higher filing fees.  The Register of Wills outlines the fees here (registers.maryland.gov/main/fees.html)

2. Attorney Fees

Many individuals choose to hire an attorney to guide them through the probate process, given its legal complexities. Attorney fees can vary significantly depending on the attorney's experience, the size and complexity of the estate, and the services provided. Attorneys typically charge the statutory fee, which is a set percentage of the estate value in regular estates, or an hourly rate or a flat fee for probate services, depending on the circumstances.

3. Executor Fees

If the deceased appointed an executor (personal representative) in their will, the executor may be entitled to receive compensation for their services. In Maryland, executor fees are typically calculated as a percentage of the estate's value. However, the executor may choose to waive their fees or agree to a different compensation arrangement, especially since those fees are considered taxable income to the executor.

4. Estate Taxes

One sometimes overlooked expense of an estate, especially a large estate, is usually the estate tax.  After the estate is opened and assets are converted to cash, those funds must be placed in an estate bank account.  In order to open the estate bank account, the estate must be assigned an EIN from the IRS.  When that number is issued, the IRS also issues a date that certain estate tax returns must be filed.  This is one aspect of probate that many individuals overlook.   Especially when assets are sold at a substantial gain, those gains must be reported and possibly incur taxes.  Seeking the guidance of an experienced CPA to help determine any tax liability of the estate is crucial in the probate process. 

5. Miscellaneous Expenses

In addition to court fees, attorney fees, and executor fees, there may be various miscellaneous expenses associated with probating an estate. These expenses may include publication costs, appraisal fees, property valuation fees, accountant fees, and any other costs incurred during the probate process.

Conclusion

Probating an estate in Maryland can be a costly endeavor, with expenses ranging from court fees to miscellaneous expenses. However, with careful planning and strategic decision-making, individuals can minimize probate costs and streamline the probate process. By understanding the various cost components involved and exploring strategies to reduce expenses, individuals can navigate probate more efficiently and ensure the timely distribution of assets to beneficiaries and heirs.

Navigating the legal intricacies of probate can be daunting, but with the right guidance and support, individuals can successfully navigate the process and preserve the deceased's legacy.

At Atkinson Law, we listen to all our clients and protect their interests so they can receive a positive legal outcome.  We’ll give you the guidance you need to navigate the probate process.  To learn more about probating an estate in Maryland, contact us today by calling (410) 882-9595 or visiting our website.