Wills and Probate
4.8
Probate Fees For their services, the lawyer and the executor are each entitled to a hefty fee from the probate estate. Many executors do not accept a fee, especially if they inherit much of the property anyway. In many states, the fees can be whatever a court approves as “reasonable.” In 1997, the U.S. Tax Court allowed an attorney’s probate fee of $1,600 per hour for a total of $368,100. In a few states, the fees are a percentage of the estate subject to probate. Either way, probate attorney fees for an uncomplicated estate with a value of $500,000 can amount to $10,000 to $15,000+. In addition, there are court costs, appraiser’s fees and other possible expenses. If there are any extraordinary services performed for the estate, the attorney or executor can often ask the court for additional fees. Some lawyers even persuade clients into naming them as executors, enabling the lawyers to hire themselves as probate attorneys and collect two fees—one as executor, one as probate attorney. One way to reduce probate fees would be for your client’s executor to appear in court without an attorney (in pro per) as the estate’s representative. A few states do not permit the executor to act without a lawyer. In fact, the only states in which it is a reasonable option for most people are California and Wisconsin. In other states where in pro per action is possible, there are no comprehensive published materials, nor is other help available to non-lawyers. Moreover, court clerks and judges are likely to be unsympathetic. Legal secretaries and paralegals typically copy necessary forms and follow procedures set out in lawyer practice manuals. In all states, rather than trying to save money by not using an attorney, it generally makes more sense to see if you can avoid probate at least for the bulk of the client’s property. This approach involves transferring the major items of the estate (e.g., home, brokerage account, etc.) outside of probate. Most states exempt small will estates from probate. The limits vary from state to state. If some of the estate will be subject to probate, the estate’s executor can try to reach an agreement with an attorney to do the probate for less than the conventional fees. The major probate avoidance methods are: [1] revocable living trusts, [2] joint tenancy and tenancy by the entirety, [3] pay-on-death designations (bank and brokerage accounts—plus vehicles and real estate in several states), [4] life insurance, [5] retirement accounts that go to a designated beneficiary, [6] state laws that exempt from probate certain amounts of property left by will and [7] gifts made while alive.
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