What does a California probate referee do, and how much does it cost?

Probate referees are appointed by the State Controller

When an estate goes through probate in California, somebody has to put a value on what the person owned. For most assets, that somebody is the probate referee.

The State Controller's Office explains how they get the job. Candidates must pass a state test on probate procedures and appraisal principles. A panel of lawyers and judges interviews the qualified candidates and makes recommendations, and the Controller appoints at least one probate referee per county. Referees also have to complete 15 hours of continuing education each year.

The Controller describes the goal as reliable, prompt and low-cost appraisal of all types of estate assets. The referee's service is required for court resolution of an estate, and the Controller says it is also available for trust administration that is not going through probate.

Fair warning: the word "referee" makes everyone picture a striped shirt and a whistle. Nobody gets a yellow card for undervaluing Grandpa's coin collection. Probably.

What the referee appraises and what you appraise yourself

The executor (the law calls them the personal representative) does part of the work. Under Probate Code section 8901, the personal representative appraises assets whose value is basically their face amount:

• Cash, checks and money orders dated on or before death
• Checks for wages earned before death, plus tax and utility refunds
• Bank and other financial institution accounts
• Cash deposits and money market funds, including brokerage cash
• Life insurance proceeds and lump-sum retirement or annuity payouts

Under section 8902, the personal representative delivers the inventory to the probate referee the court designates, along with supporting information, and the referee appraises everything else. That usually means the house, other real estate, stocks, vehicles and personal property.

Two escape hatches exist. Section 8904 lets the executor use an independent expert for an item of tangible personal property that is unique, artistic, unusual or special, and the referee can ask the court to decide within five days after the inventory is delivered. Section 8903 lets the court waive the referee's appraisal, but only for good cause, on a petition with notice and a hearing.

How much a probate referee costs

The fee is set by statute, not negotiated. Probate Code section 8961 gives the referee a commission of one-tenth of one percent (0.1%) of the total value of the property the referee appraised, plus actual and necessary expenses. Assets the executor appraised, like bank accounts, are not part of that base.

Property valued by an independent expert under section 8904 is also left out of the base. So a large estate made up mostly of cash can owe a small commission, while a modest estate that is nearly all house will owe 0.1% of the house. The fee follows what the referee actually valued, not the size of the estate on paper.

Section 8963 then adds a floor and a ceiling: no less than $75 and no more than $10,000 per estate. The court can approve more than $10,000 if it finds the reasonable value of the referee's services is higher.

These are hypothetical estates, and expenses come on top. On an $800,000 house and nothing else for the referee to value, the commission would be $800. In probate, that may be the one line item nobody in the family fights about.

Probate referee or private appraiser?

This is not either-or. If the estate is in probate, the referee's appraisal goes on the inventory for the court. That is its job.

A private appraisal answers different questions. Heirs often need a documented date-of-death value to support their tax basis. Siblings may need a current value for a buyout. A trustee may need to set a listing price. Ask what the referee's appraisal will include, and then decide whether you also need a report built for one of those purposes.

What I do on estate work is a narrative report that shows the work: the house as it stood on the effective date, the sales that matter, how each difference was measured, and why the value lands where it does. A CPA, an attorney or a skeptical sibling should be able to follow it without a phone call. A report should teach the reader the market. A number with no reasons behind it is a guess wearing a tie.

Facts over feelings applies here too. Whoever does the appraisal, the value should come from what the market actually did, not from what the family hopes the house is worth.

What to do as the executor

1. Ask your attorney for the referee's name once the court designates one.
2. Value the cash items yourself: bank accounts, checks, money market funds and insurance payouts listed in section 8901.
3. Send the referee a complete inventory with supporting information: the deed, the property tax bill, recent statements, and notes about the house's condition on the date of death.
4. Flag anything unusual. Art, collectibles or other one-of-a-kind personal property may qualify for an independent expert under section 8904.
5. Talk to your attorney before asking for a waiver. The court only waives a referee appraisal for good cause.
6. Budget for the commission and expenses. Use the 0.1% rule, the $75 floor and the $10,000 cap to estimate it.
7. Decide whether heirs need a separate appraisal for tax basis or a buyout, and order it early.

This is general information. Probate procedure depends on the facts, so confirm the details with a California attorney.