By Lloyd A. Welling, Esq.
May 31, 2019
How much do Probate Estate Administration attorneys charge? The answer can vary wildly depending on where you live and how large or complicated the estate in question may be. Remember also, you can typically hire an attorney to handle the whole estate administration process from start to finish or simply to assist you along the way if you’re going to try to handle the matter on your own. Either way, some kind of fee arrangement will be involved.
Typical Estate Administration Fee Arrangements
Most Estate Attorneys will propose using one of following three methods to when it comes to billing their clients for estate administration work:
Hourly Billing
Hourly rates can vary greatly depending on the experience and background of the attorney, where you live and the relative complexity or simplicity of the estate in question. Rates may range anywhere from $150 to $350 per hour, but typically fall somewhere in the middle of that range. Likewise, while those amounts represent the fee to be paid to the attorney handling the matter, there may also be separate (usually lower) rates and charges applied for those administrative services that are being handled by the attorney’s paralegal or other office staff.
As a rule of thumb, larger law firms typically charge higher rates than small firms or sole practitioners. Also, an attorney who does nothing but Estate Planning and Probate Estate Administration work is likely to charge higher hourly rates than a general practitioner. However, the advantage to hiring the specialist is that they will typically be able to get the job done in a more efficient and timely manner. Still, the biggest problem with hiring an attorney on an hourly basis is that you’ll have no idea what your total legal fees and costs are going to be until you get to the end of the process. If you’re someone who likes to know exactly what they will be paying upfront, then this is probably not the type of fee arrangement that you’ll want to have.
Percentage of the Estate’s Value
Probably the worst way to hire an estate attorney is on a statutorily prescribed percentage basis. Only a handful of states still implement and allow this type of arrangement, but many attorneys will try to utilize this method because it often results in a very high fee relative to the work and services that they will actually be providing. Moreover, percentage fee arrangements are typically calculated on the gross rather than the net value of the estate. For example, if the estate includes a home that is worth $500,000 that still has an outstanding mortgage balance of $250,000 left owed on it, the attorney’s fee would be based on $500,000 and not the actual $250,000 equity value of the property. While Pennsylvania does not have an actual statutorily prescribed probate fee schedule, many practitioners here rely on a fee schedule that was followed by the court in an old case known as the Johnson Estate. To give you an idea of just how high the legal fees could be applying the Johnson Estate approach here’s the percentage breakdown the court followed in that case:
$00.01 to $25,000.00 7% $1,750.00
25,000.01 to $50,000.00 6% $1,500.00 to $3,250.00
$50,000.01 to $100,000.00 5% $2,500.00 to $5,750.00
$100,000.01 to $200,000.00 4% $4,000.00 to $9,750.00
$200,000.01 to $1,000,000.00 3% $24,000.00 to $33,750.00
$1,000,000.01 to $2,000,000.00 2% $20,000.00 to $53,750.00
$2,000,000.01 to $3,000,000.00 1½% $15,000.00 to $68,750.00
$3,000,000.01 to $4,000,000.00 1% $10,000.00 to $78,750.00
$4,000,000.01 to $5,000,000.00 ½% $5,000.00 to $83,750.00
Following this approach would mean that on an estate with a gross value of $850,000 the approved attorneys fees would be a whopping $40,000.00. As you can surely see, this is probably not the best method to select when hiring an estate attorney.
So if hourly rates and percentage fee arrangement are not the best way to go, what’s left?
Flat Fees
From a client’s perspective, the flat fee arrangement is probably safest and most straightforward when it comes to hiring an estate attorney. You’ll know in up front and in advance exactly what your legal fees are going to be. Likewise, attorneys often prefer this method as well because it eliminates the need for them to keep detailed records of their billable hours.
With this type of arrangement you don’t need to worry about running up your bill every time you want to ask your attorney a question. This typically also eliminates a lot of the stress and anxiety that clients often have when it comes to hiring and working with an attorney. Just make sure you know and understand what the flat fee arrangement is going to actually cover because if will often not include the filing fees and costs typically associated with the probate process.
Get Your Fee Agreement in Writing
Regardless of the fee arrangement that you end up choosing, make sure that you get the agreement in writing. Most states require lawyer-client fee agreements to be in writing and even if you state doesn’t, do yourself a favor and get it in writing anyway. You’ll sleep better and you’ll have more confidence in the attorney you’ve decided to hire.
*The author is the founding partner in the law firm of American Wills & Estates and has been guiding clients in Pittsburgh and throughout Western Pennsylvania through the Probate Estate Administration process with competency, compassion and care for over 26 years. You can contact Attorney Welling directly at (412) 381-7370 or learn more about his law firm online at www.americanwillsandestates.com