Minimum attorney fees for settling estates in PA
Rich Carreiro
last year.
The executrix of the estate is the decedent's sister. To
be very clear, no lawyer or law firm was named as the executor
of the estate.
The executrix has reported to my wife that the lawyer the executrix
has engaged (the same lawyer who drew up the decedent's will) claims
that he, the laywer, is entitled under PA statute to some minimum
percentage of the estate.
That sounds totally and completely bogus to me.
I could see it if the lawyer *was the executor* of the estate.
However, that is *not* the case here.
In other words, I think the estate is basically being ripped
off by the guy.
I was therefore wondering if any of you with knowledge of PA
probate law could give me some pointers (to PA statutes,
PA probate FAQs, etc.) to documentation showing (hopefully) that
this lawyer is mistaken or lying, so that I can get this information
to the executrix before she pays out any more money to the lawyer.
Thank you!
--
Rich Carreiro rlc-...@rlcarr.com
David L. Martel
Someone has died in Pa. The estate is being handled by a relative of the
decedent, with the advice of an attorney. You ask how to judge the
reasonableness of the attorney's fees.
I don't believe that Pa. controls legal fees so a good guide would be to
find out what is "usual and customary". Be aware that the executor certainly
has the right to get legal advice and that such advice is billed to the
estate.
Good luck,
Dave M.
Mike Jacobs
> The executrix of the estate is the decedent's sister. To
> be very clear, no lawyer or law firm was named as the executor
> of the estate.
But apparently, the executrix hired a lawyer to work for the estate.
Isn't he entitled to be paid for his work?
> The executrix has reported to my wife that the lawyer the executrix
> has engaged (the same lawyer who drew up the decedent's will) claims
> that he, the laywer, is entitled under PA statute to some minimum
> percentage of the estate.
What did she agree to when she hired him? IOW, what does their
written retainer agreement say?
Percentage fees are very common for estate administration work. If
that's what the retainer contract provides, that's what the estate
owes.
I don't know PA law, but state law generally sets a MAXIMUM, not a
minimum, fee that an estate lawyer (or the executrix herself) can
charge the estate, for the work of administering the estate.
My guess is, this lawyer's retainer contract provides that his fee
will be the maximum percentage allowed by PA law and that the
executrix waives her own statutory fee in favor of the lawyer. Very
commonly done where the executrix is a family member who doesn't want
to, or doesn't have the time to, do all the work involved in wrapping
up the estate but simply wants to and is entitled to supervise.
> That sounds totally and completely bogus to me.
I think someone just mixed up "minimum" and "maximum." Other than
that, why do you think it's bogus?
> I could see it if the lawyer *was the executor* of the estate.
> However, that is *not* the case here.
So, who is doing most of the actual work of administering the estate?
> In other words, I think the estate is basically being ripped
> off by the guy.
"Ripped off" if he's getting paid a lot for doing essentially
nothing. Not if he is basically stepping into the shoes of the
executrix and doing most of her work for her to sign off on.
> I was therefore wondering if any of you with knowledge of PA
> probate law could give me some pointers (to PA statutes,
> PA probate FAQs, etc.) to documentation showing (hopefully) that
> this lawyer is mistaken or lying, so that I can get this information
> to the executrix before she pays out any more money to the lawyer.
In most cases, except for very small estates, estate administration
costs (including lawyer fees and executrix fees) are subject to actual
court oversight, and a final accounting must be provided to the court
for approval before the estate can be closed. Anyone involved in the
administration of the estate who does something not in compliance with
state law is going to be called to account for it, and may wind up
being penalized and charged out of his own pocket to make it good; the
goal of the law here is to protect the estate's creditors and heirs,
not to line the pockets of its administrators, which is why I'm sure
the applicable law sets a MAXIMUM percentage fee allowable. But ISTM
that such a bright-line test gives everyone a pretty clear indication
that a retainer which asks for such a fee is a reasonable one.
If executrix decides, on your advice perhaps, to fire this attorney
and hire another one, she will have to pay the first one for his time
and work to date, and will also have to pay the new one for his
learning curve in getting up to speed on the stuff the former lawyer
already did before the new lawyer can move on to new stuff. IOW,
there is some wasteful overlap if that is done. Unless your family
is genuinely dissatisfied with the first lawyer -- lazy, incompetent,
whatever -- you will probably be worse off in the end if you fire him
and hire somebody else, than if you just let him finish the job. My
$0.02.
--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult your own lawyer in a
private communication.
Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300
Rich Carreiro
> On Aug 6, 7:14 am, Rich Carreiro <rlc-n...@rlcarr.com> wrote:
> > The executrix of the estate is the decedent's sister. To
> > be very clear, no lawyer or law firm was named as the executor
> > of the estate.
>
> But apparently, the executrix hired a lawyer to work for the estate.
> Isn't he entitled to be paid for his work?
Of course he is. I'd love to know by what process you used to
conclude I believe the lawyer shouldn't be paid at all.
But that doesn't excuse him falsely claiming
that state law entitles him to a certain percentage of the estate
and then charging his usual hourly rate on top of that.
As the PA Bar Association itself says at:
http://www.pabar.org/clips/estateplanning.pdf
(which I found after making my original post)
in the "Costs of Probate" section:
"Talk to your lawyer to find out whether services will be based on
an hourly fee, a flat rate, or on a percentage of the estate assets
and what would work best for you."
Which would certainly appear to put paid to this guy's claim
that state law entitles him to some minimum percentage.
> there is some wasteful overlap if that is done. Unless your family
> is genuinely dissatisfied with the first lawyer -- lazy, incompetent,
> whatever
How about "being a liar"? Or is that not something we simple plebes
should be "genuinely dissatified" about in a lawyer these days?
> you will probably be worse off in the end if you fire him
> and hire somebody else, than if you just let him finish the job.
That may well be so, especially with it being 13 months in to
the process, and perhaps the heirs will have to eat the rip-off
for just that reason. But that doesn't excuse the lawyer for
lying, and the heirs and executor should know so that they can
make a fully informed decision on how to go forward and/or whether
to file any complaints with the PA Bar.
I am not making any recommendations to the executor about firing, etc.
In fact, the only recommendation I'm making is to call around (which
the executor certainly should have done at the beginning, rather than
making the all-too-common mistake of simply hiring the guy who drew up
the decedent's will) to get a sanity check on fees, and also pointing
the executor to stuff like the PA Bar Association pamphlet referenced
above, as well as some other PA probate legal sites I've found which
also state explicitly (with cites) that there's no minimum
entitlement.
--
Rich Carreiro rlc-...@rlcarr.com
David L. Martel
Found this chart after I sent the previous post. It seems to answer your
question.
http://evans-legal.com/dan/estfees.html
> Good luck,
> Dave M.
>
>
Don
> In most cases, except for very small estates, estate administration
> costs (including lawyer fees and executrix fees) are subject to actual
> court oversight, and a final accounting must be provided to the court
> for approval before the estate can be closed. Anyone involved in the
> administration of the estate who does something not in compliance with
> state law is going to be called to account for it
I have been told that, in some backward areas of the nation, judges
look the other way when lawyers charge excessive fees for handling
estates. So court oversight would be a joke if judges and lawyers are
in cahoots. I am wondering just how common this kind of thing might be.
Does anyone know whether it is a rare occurrence and not really a
problem or if it is more widespread that most people believe?
Mike Jacobs
> Mike Jacobs <mjacobs...@gmail.com> writes:
> > On Aug 6, 7:14 am, Rich Carreiro <rlc-n...@rlcarr.com> wrote:
> > > The executrix of the estate is the decedent's sister. To
> > > be very clear, no lawyer or law firm was named as the executor
> > > of the estate.
>
> > But apparently, the executrix hired a lawyer to work for the estate.
> > Isn't he entitled to be paid for his work?
>
> Of course he is. I'd love to know by what process you used to
> conclude I believe the lawyer shouldn't be paid at all.
Please don't jump to conclusions based on emotion rather than reason,
Rich. I just asked a question; a question is not an accusation. I
didn't assume you held that belief; rather, I _asked_ you, so you
could verify that you were in agreement with the basic starting
principle that the lawyer _was_ entitled to be paid something.
Critically examining the underlying assumptions for virtually
everything is something that must be done if one is to ensure that the
conclusions one reaches are not based on hidden, irrational emotional
assumptions rather than principles universally acknowledged to govern
a situation.; and to be sure they are understood, those principles
must be stated. Your grad school math professor doesn't assume you
are incapable of understanding the basic principles of algebra which
you already learned in high school, when the first thing he does is
make the class start questioning every basic axiom on which the system
will be built. But you're right, my query was meant to explore one
possible reading of the second sentence of your post, to make sure you
were _not_ holding a hidden assumption that _only_ the executor/trix
of an estate is allowed to be paid a percentage fee. Otherwise, why
would you mention at all the fact that the lawyer was not the
executor, much less emphasize it so strongly?
> But that doesn't excuse him falsely claiming
Who made the claim? Have you spoken or corresponded directly with the
lawyer? Have you seen a letter or contract in which he said what you
think he said? Or are you relying on second- or third-hand hearsay
which may have gotten garbled in the translation? My guess, and it's
only a guess, is that someone _other_than_ the attorney mixed up
"maximum" and "minimum" when relying this info to you. But of course
you would have to go back to the original source to see what was
_really_ said.
And, as I mentioned in my first reply, what does the attorney's
written retainer agreement say? That would seem to be the best place
to look if you wanted to know what your relative the executrix agreed
in advance as to how his fee was to be calculated.
> that state law entitles him to a certain percentage of the estate
As another poster pointed out in his response to you today, caselaw in
PA holds that a percentage fee of 3% is "presumptively reasonable."
So if that's what he's charging, your state's law is OK with that.
But that makes it a "maximum" fee, NOT a "minimum" fee. The way your
first post phrased it (the lawyer claiming to be entitled to a MINIMUM
fee regardless of how little work he did) makes no sense, as I think
you agree it makes no sense, but that's why I thought it was probably
not what was zctually said, and that someone somewhere in the chain of
transmission of this message just got their similar-sounding but
opposite-meaning terms mixed up.
> and then charging his usual hourly rate on top of that.
That's a different ball of wax. You never said in your first post
that he did that. You only said he was asking for a percentage fee.
OTOH there's nothing wronig with asking for a combination of a
percentage and an hourly rate, as long as, in the particular case, the
total amount this comes to does not exceed an amount the court will
allow.
The key is that no matter how the fee is calculated, the _total_ fee
an attorney charges has to be "reasonable." The PA caselaw summary
another poster linked to today gives you a good overview of what the
PA courts will look at to make that decision in the context of an
estate matter.
> As the PA Bar Association itself says at:
> http://www.pabar.org/clips/estateplanning.pdf
> (which I found after making my original post)
> in the "Costs of Probate" section:
> "Talk to your lawyer to find out whether services will be based on
> an hourly fee, a flat rate, or on a percentage of the estate assets
> and what would work best for you."
Yes? And, what did your relative the executrix decide, when she
consulted with the lawyer for purposes of hiring him? Wasn't the
result of their discussion then set down in a written fee retainer
agreement? And whether or not it was written down, is the total fee
claimed, in the end, a reasonable one, under all the circumstances?
ISTM those are the questions you need to be asking her.
> Which would certainly appear to put paid to this guy's claim
> that state law entitles him to some minimum percentage.
You still haven't given us anything from the horse's mouth to have
reason to believe the attorney actually said that.
If he did, then I agree with you, he's an idiot and a scoundrel. But
that's a big "if."
> > there is some wasteful overlap if that is done. Unless your family
> > is genuinely dissatisfied with the first lawyer -- lazy, incompetent,
> > whatever
>
> How about "being a liar"? Or is that not something we simple plebes
> should be "genuinely dissatified" about in a lawyer these days?
You're getting emotional again, Rich. Try to keep this on a rational
level. Stick to the facts you know, not those you presume; and
_ask_questions_ to find out about the facts you don't know yet. Even
if you have a hunch what the answer will be, that's not the same thing
as presuming the answer.
To answer your question, yes, if the lawyer actually said words to the
effect that PA state law entitles him to a "minimum" percentage of the
estate regardless of how tiny an amount of work he actually did, and
especially if he then also asked for an hourly fee ON TOP OF that
percentage, then if I were you I'd report him to the state bar
authorities for ethical violations. But don't go there yet, since I
don't think you have any evidence yet that this is what he actually
said.
<snip>
> I am not making any recommendations to the executor about firing, etc.
> In fact, the only recommendation I'm making is to call around (which
> the executor certainly should have done at the beginning, rather than
> making the all-too-common mistake of simply hiring the guy who drew up
> the decedent's will) to get a sanity check on fees,
Make sure you (or your relative) actually know and understand what the
current attorney intends to charge, before asking for comparisions.
> and also pointing
> the executor to stuff like the PA Bar Association pamphlet referenced
> above, as well as some other PA probate legal sites I've found which
> also state explicitly (with cites) that there's no minimum
> entitlement.
Of course there isn't. That would be absurd. Which is why I highly
suspect the lawyer never actually said that in the first place, and
someone just got "minimum" and "maximum" confused.