You can hire an attorney to handle the whole probate case or just help you do it. Either way, keep in mind that as executor, you don’t pay the probate attorney’s fee from your own pocket. You can use estate assets to pay the bill, before inheritors get anything.
Attorneys usually use one of three methods to charge for probate work: by the hour, a flat fee, or a percentage of the value of the estate assets. Your attorney may let you pick how you pay—for example, $350/hour or a $10,500 flat fee for handling a routine probate case.
Many probate attorney’s bill clients by the hour. The hourly rate will depend on how much experience and training the attorney has, where you live, and whether the lawyer practices in a big law firm or a small one. Small town rates may be as low as $150/hour; in a city, a rate of less than $200/hour would be unusual. Big firms generally charge higher rates than sole practitioners or small firms, unless a small firm is made up solely of hot-shot specialists. An attorney who does nothing but estate planning and probate will likely charge a higher hourly rate than a general practitioner. The advantage to you is that a specialist should be more efficient. Someone who has steered many probates through the local court has probably learned all the local rules and how to prepare and file documents the way the court likes them. If your attorney employs less experienced lawyers (associates) and legal assistants (paralegals), their time should be billed at a lower hourly rate. This is very common in firms that do probate work; legal assistants often draw up the routine paperwork. Many attorneys bill in minimum increments of six minutes (one-tenth of an hour). So, if your attorney (or a legal assistant) spends two minutes on a phone call on behalf of the estate, you’ll be billed for six minutes.
It’s also common for attorney to charge their probate clients a flat fee. That way, they don’t have to keep down-to-the-minute records of how they spend their time. (Attorneys don’t like keeping track of their “billable hours” any more than clients like paying for all those six-minute intervals.) And because they have a good idea of how long an average probate will take, they can charge a fee that will be close to what they would get if they billed by the hour. If you’re billed this way, you don’t have to worry about running up the bill every time you want to ask a question of the attorney. It can be a more relaxed experience. If you agree to pay a flat fee for legal work, make sure you understand what it does and does not cover. For example, you may still have to pay separate court filing costs, fees to record documents, or appraiser’s fees.
Percentage of the Estate’s Value
The worst way to pay a probate attorney from the estate’s point of view is to pay a percentage of the value of the estate as the fee. This is customary only in a few states. And even in those states, attorneys are not required by law to collect a percentage fee. You can and should try to negotiate an hourly rate or flat fee with the lawyer. But many attorneys prefer the statutory fee because it’s usually very high in relation to the amount of work they have to do. These fees are often high under the circumstances because they are calculated based on the gross value of the probate assets, not the net value. For example, if you’re handling an estate that includes a house worth $300,000, with $175,000 left on the mortgage, the lawyer’s fee would be based on $300,000 not the $125,000 of equity the estate actually owns. And the probate paperwork for a transferring a $1 million house is basically the same as it is for transferring a $150,000 house so why should the fee be so different?
You can get an idea of how high these fees are by looking at Utah’s statutory fee schedule. For “ordinary” services, an attorney can collect:
• 4% of the first 100,000 of the gross value of the probate estate
• 3% of the next $100,000
• 2% of the next $800,000
• 1% of the next $9 million
• ½% of the next 15 million
• “a reasonable amount” of anything over $25 million
Get Your Fee Agreement in Writing
No matter what kind of fee arrangement you have, get the terms in writing. Some states require certain attorney-client fee agreements to be in writing; whether or not that’s true where you live, it’s a good idea. As with most agreements, the most valuable part is not having all the terms on paper—it’s the discussion that leads to writing them down.
The agreement should cover:
• the flat fee, or the hourly fee of each lawyer and legal assistant who may work on the estate
• which attorney will be your main contact at the firm
• an estimate of the total cost or the total number of hours
• expenses you pay separately, such as court fees, postage, and publication of legal notices
• how the attorney’s work will be described on the bills (the work done in each increment of time should be described, so you don’t just get a bill for “legal services,” “research” or “trial preparation”)
• how often the firm will bill you, and
• when your payments will be due.
One of the reasons that many people find hiring a probate attorney intimidating is that there’s no price tag in sight. Many clients literally have no idea how much they might end up owing. But the process doesn’t have to be so mysterious. If you’ve found that you need expert help, first become familiar with the different ways lawyers charge. Second, protect yourself by getting a written fee agreement from the lawyer. Remember that the estate pays the probate lawyer’s fee—it doesn’t come out of the executor’s pocket. Of course, if you are both the executor and the only inheritor, then the fee does, in essence, come out of money that is soon to belong to you. Otherwise, the cost is taken from the estate before assets are distributed to the people who inherit them.
Probate “Costs” or “Expenses” vs. Legal Fees
“Costs” are how attorney refer to all the miscellaneous expenses that arise during a probate or other court proceeding. They can add up to a considerable sum, depending on the circumstances. Some examples include court filing fee, postage, publication of legal notices in the newspaper, property appraisals, and recording fee for real estate deeds. When you hire an attorney on behalf of the estate, get a fee agreement in writing. It’s required by law in some states, and it’s a good idea no matter where you are. The agreement should state: the hourly fee of each lawyer and paralegal who may do work for you, an estimate of the total cost or number of hours, other costs you may need to pay (including court fees, postage, publication and so on), how often you will be billed, when payment will be due, and how detailed the bill will be (each item should be described, so you don’t just get a bill for unspecified “legal services”).
Costs To Go To Probate Court
Probate litigation is expensive. The process can cost anywhere from 3 to 8% of the estate value.
Attorney’s fees are the highest probate expense. Probate lawyers are tasked with a multitude of duties. They are responsible for filling the petition to open the estate, noticing heirs, beneficiaries, and creditors, determining the estate’s assets and debts, distributing moneys, and closing the estate. Hourly fees depend on multiple criteria: complexity, area of the litigation, and attorney experience. Experienced attorneys managing complex cases charge up to $300/hour. On the other hand, lawyers charge closer to $150/hour for simple cases. Legal fees are more expensive it in large cities relative to rural areas. Flat fee arrangements set forth the total attorney’s fees upfront. This “lump sum” payment in most cases only includes the lawyer’s fee. No matter the financial arrangement of the attorney’s fees, make sure to get the rates in writing specifying exactly what is being covered. This helps save yourself from troubles down the road.
The probate filing fee is the amount you pay to the court to open the litigation. The cost of filing fees varies from court to court. Filing fees normally range from $385 to $5,000. In some jurisdictions, the filing fee increases as the value of the estate increases.
Personal Representative Fee.
Executors or personal representatives (the administrators of the estate) are permitted to charge a fee for their labor. The personal representative fee is often set forth via local laws. Rates typically are between $15 to $50 per hour depending on the skill and expertise of the personal representative. If the laws don’t address the personal representative fee, jurisdictions require the fee to be “reasonable”. Beneficiaries and heirs may challenge exorbitant personal representative fees. Personal representatives are often responsible for managing funeral or burial, prepare a list of estate assets (bank accounts, personal and real property, and personal items), paying on-going taxes, and decision-making and oversight.
“Bond fees” are a payment required of the executor of the estate in order for probate litigation to proceed. The amount is set by the judge. The purpose of the bond fee is to protect the estate from misconduct or unfair dealings. Executors are unlikely to act unethically if they are subject to lose their bond.
Real Estate Appraisals
Real estate is the most common probate asset. In some cases, courts require certified appraiser to assess the just market value of the property. This is particularly important when probate property must be sold to pay off creditors or the estate is to be divided among a host of beneficiaries. The average cost of a single-family home appraisal ranges from $300 to $400, multi-family is $600, and large commercial and residential buildings increase to substantially higher ranges. Home appraisals compare the subject property to local sales, taking into consideration property condition, special features, geographic location, market conditions, and replacement costs.
Ways To Pay For Probate
• Paying With Your Own Cash: Although probate may costs thousands (if not tends of thousands), some may have that money available. If you’re in position to fund the probate on your own, that is most straightforward route to beginning the estate case.
• Distribution of Estate Proceeds: Attorneys frequently are willing to front the entirety of probate costs if they are confident they will be repaid upon closing the estate. Of course, this is a “leap of faith” on the part of the attorney that there will be moneys left over after all creditors have been paid, and so legal fees are higher in this arrangement. The attorney has incentive to pay for the probate because otherwise they will get no attorney fees whatsoever. It’s a “win win” for you and the lawyer.
• Professional Cash Home Buyer: Real estate is regularly sold during the probate process. Often, the buyer will gladly front all the costs. The advantage of the buyer here is that unless probate gets paid for they can’t buy the house. This arrangement is also helpful for the heirs that don’t have other financial means to begin the probate process.
• Percentage of An Estate: Some attorneys will take on a probate case in return for a percentage of estate proceeds. This arrangement usually applies on “high value” complicated estates where an experienced attorney is absolutely necessary. However financially speaking it is not beneficial for the estate. A percentage of estate proceeds in most cases add up to much more than regular legal fees.
• Pro Bono & Legal Aid: States often waive filing fees when the person filing for probate has income below statutory guidelines.
What Does a Probate Attorney Do?
Your probate attorney begins the legal process by filing the will with the court, or, if there is no will, by asking the court to appoint the next of kin as the “administrator” who is then charged with handling the estate according to that state’s laws including intestacy laws – that is, who is to inherit in the absence of a will. If a will exists, the court must evaluate the will and determine if it was properly signed by the testator and witnessed according to state law. On occasion, depending again on state law, it may be necessary to call witnesses during this process, and the people who witnessed the will may have to testify and it may also be necessary to conduct a hearing about the mental abilities of the testator at the time the will was executed. The probate attorney handles all of this. In some situations, people may file to contest a will, claiming the will is invalid, or that it was not properly executed or that it was the product of undue influence or coercion of the deceased. In these instances, a trial may be necessary, and an experienced probate lawyer will handle all of these concerns. During the probate process, the executor or administrator must account for all of the deceased’s assets and in some states file a complete inventory with the court. The probate lawyer must also help the executor investigate, obtain and organize all of the bills of the estate, such as outstanding bills from before the person died as well as bills that become due after the death, including costs involved in maintaining a home during the probate process or appraisals to determine the value of some items. The probate attorney also advises the executor or administrator about tax issues including the need to determine whether income tax returns, estate tax returns, and inheritance tax returns need to be filed. Probate attorney also guide executors and administrators who have the responsibility of distributing the assets to the heirs once the probate process is concluded and ensuring that everyone gets what they are entitled to under the will. In addition to wills, probate attorneys also handle the estates of people who die without wills. In these situations, their assets are distributed according to state intestacy laws. Probate attorneys also create and administer living trusts, special legal entities set up to manage assets during life and then distribute them after death, outside the reach of the probate court.
Why Should You Hire a Probate Lawyer?
The probate process is a complex one that is overseen by a specialized court that focuses almost entirely on probate cases. It also can include very significant tax issues that can arise even in relatively modest probate cases. If your loved one dies with any significant assets, you need to hire a probate attorney to make sure everything is handled correctly. In any case involving a trust, substantial assets, a surviving spouse who is not a US citizen, or questions about the validity of a will, it is essential to have a knowledgeable probate attorney. Probate attorneys are familiar with the intricacies of state laws. They can smoothly move a will through probate, solving any problems that could come up. Probate attorneys are also knowledgeable about estate tax laws and ensure that required taxes are paid and that the executor or administrator does not become personally liable for those obligations and that the estate does not overpay.
Free Initial Consultation with Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506