If an attorney is helping you administer an estate, you will need to pay him or her.  Attorneys charge for helping to administer an estate in different ways. I’m sure there are many imaginative ways that attorneys can bill for their work administering estates, but I will deal with three methods here.

Some attorneys bill based on an hourly rate for the time they work on the estate.  The more time the attorney spends, the greater the fees.  For the estate, that means the fees may be lower than other methods because even if the estate has a lot of assets, it may not take an extraordinary amount of time to administer the estate.  The flip side also applies.  If the estate is complicated or for some reason takes more attorney time to administer, the estate may pay more attorney fees even if the assets are not exceptionally valuable.  There is uncertainty inherent in hourly billing because the estate does not know the final cost up front.

The second method is flat fee billing.  The attorney quotes a total fee up front, which is not subject to change or is subject to change only in limited, specific circumstances.  The plus side for the estate is the certainty of knowing the total fees before engaging the attorney.  The potential downside is that the flat fee may be more than the attorney fees would have been if calculated based on hourly billing or a percentage of the estate assets.  Therefore, the certainty of flat fee arrangements may ultimately cost the estate more.

Last, but not least, is an arrangement where the attorney’s fees are calculated as a percentage of the estate assets.  This arrangement should be very specific about what assets are included in the total value, the percentage applied, whether the percentage varies depending on the specific assets, how the debts enter into the calculation, etc.  Having an idea of the estate assets up front, you can often calculate a reasonable estimate of the fee before engaging the attorney, which may be appealing.  The potential downside is that greater estate assets do not necessarily mean more work to administer the estate, so the estate may pay more attorney fees in some situations compared to an alternative billing method.

There is no “one size fits all” solution for determining attorney’s fees when administering an estate.  Most importantly, the estate administrator needs to make sure she understands the fee arrangement and is comfortable working with it.

If you live or work in the central Pennsylvania area, including Hershey, Carlisle, Harrisburg, Mechanicsburg and surrounding communities and would like to discuss attorney’s fees or any other family law or estate planning or administration issue, please contact me.