When a client approaches an attorney for legal representation regarding an estate matter, the cost of the proceedings is often foremost in their minds. Not all estate proceedings involve the same issues. Some cases involve complicated legal work, while other cases have limited assets and the legal work is greatly reduced. The purpose here is to discuss the types of fees attorneys charge in estates.
Under an hourly billing retainer agreement, the attorneys and paralegals in the law firm perform their legal services and charge the client an hourly billing rate. These billing rates usually go for attorneys from $300 per hour to $500 per hour and for a paralegal between $100 per hour and $200 per hour.
There are both benefits and drawbacks to an hourly billing retainer agreement. A benefit is if there is not a lot of legal work, you only pay for the legal work you need. The drawback is you do not have a specific price which you are going to pay for the legal services rendered.
In cases where the executor is involved in collecting assets, dealing with creditors, meeting with and discussing issues with beneficiaries, legal fees can be greatly reduced. In cases where the executor is unable to perform any significant work on the case, or the case is complicated and/or there are legal problems involving the estate, the legal fees on an hourly basis can mount up. This is especially true when there is litigation involved in the estate.
A second arrangement for legal fees concerning legal representation on an estate is based on a percentage basis. The legal fee can be a set fee such as 5% of the estate or it can be a percentage based on the amount of assets collected. An example of this would be 5% of the first $100,000 of assets, 4% of the next $200,000 of assets, 3% of the next $700,000 of assets, and 2% of the next $2,000,000 of assets. In these cases, the fee can easily be calculated and the client is aware of a definitive amount this legal representation will cost based on an estimate of the value of the estate. In these percentage cases, it is assumed the attorney will do virtually all of the work on the estate administration and the executor will just sign documents provided to him or her by the attorney.
In some cases a set fee basis retainer agreement is entered into between the client and the attorney. It can usually be undertaken where the issues are not complicated, none of the potential beneficiaries are unknown or missing and there are no minors involved in the estate. A common situation where this type of retainer agreement can be used is where the individual who died was survived by his or her spouse and children. There is usually an exception in the set fee estate retainer agreements if litigation and/or unusual problems occur. Flat fee retainers usually spell out the specifics of the legal work involved and the additional circumstances which might require further legal fees.
If you approach an attorney with regard to legal representation on an estate, you should discuss the legal fees prior to retaining the attorney.