Often when a family member does not want to be executor or personal representative, a Florida probate court will appoint an attorney or possibly a bank to be the executor or PR of an estate.
If an attorney is appointed to settle an estate, the attorney will incur filing fees and other expenses. How and when is the attorney reimbursed for those out pocket fees and when does the attorney finally get paid for his work. Is he paid when the estate is finally settled and all the work is finished or is he paid in installments and how are those payments made?
Estate Planning Attorney
An attorney typically provides a potential client with an engagement letter that describes the attorney's billing procedure.
The respective Florida law follows:
733.6171Compensation of attorney for the personal representative.–
â€ƒ(1)Attorneys for personal representatives shall be entitled to reasonable compensation payable from the estate assets without court order.
â€ƒ(2)The attorney, the personal representative, and persons bearing the impact of the compensation may agree to compensation determined in a different manner than provided in this section. Compensation may also be determined in a different manner than provided in this section if the manner is disclosed to the parties bearing the impact of the compensation and if no objection is made as provided for in the Florida Probate Rules.
â€ƒ(3)Compensation for ordinary services of attorneys in formal estate administration is presumed to be reasonable if based on the compensable value of the estate, which is the inventory value of the probate estate assets and the income earned by the estate during the administration as provided in the following schedule:
â€ƒ(a)One thousand five hundred dollars for estates having a value of $40,000 or less.
â€ƒ(b)An additional $750 for estates having a value of more than $40,000 and not exceeding $70,000.
â€ƒ(c)An additional $750 for estates having a value of more than $70,000 and not exceeding $100,000.
â€ƒ(d)For estates having a value in excess of $100,000, at the rate of 3 percent on the next $900,000.
â€ƒ(e)At the rate of 2.5 percent for all above $1 million and not exceeding $3 million.
â€ƒ(f)At the rate of 2 percent for all above $3 million and not exceeding $5 million.
â€ƒ(g)At the rate of 1.5 percent for all above $5 million and not exceeding $10 million.
â€ƒ(h)At the rate of 1 percent for all above $10 million.
â€ƒ(4)In addition to fees for ordinary services, the attorney for the personal representative shall be allowed further reasonable compensation for any extraordinary service. What is an extraordinary service may vary depending on many factors, including the size of the estate. Extraordinary services may include, but are not limited to:
â€ƒ(a)Involvement in a will contest, will construction, a proceeding for determination of beneficiaries, a contested claim, elective share proceeding, apportionment of estate taxes, or any adversarial proceeding or litigation by or against the estate.
â€ƒ(b)Representation of the personal representative in audit or any proceeding for adjustment, determination, or collection of any taxes.
â€ƒ(c)Tax advice on postmortem tax planning, including, but not limited to, disclaimer, renunciation of fiduciary commission, alternate valuation date, allocation of administrative expenses between tax returns, the QTIP or reverse QTIP election, allocation of GST exemption, qualification for Internal Revenue Code ss. 6166 and 303 privileges, deduction of last illness expenses, fiscal year planning, distribution planning, asset basis considerations, handling income or deductions in respect of a decedent, valuation discounts, special use and other valuation, handling employee benefit or retirement proceeds, prompt assessment request, or request for release of personal liability for payment of tax.
â€ƒ(d)Review of estate tax return and preparation or review of other tax returns required to be filed by the personal representative.
â€ƒ(e)Preparation of the estate’s federal estate tax return. If this return is prepared by the attorney, a fee of one-half of 1 percent up to a value of $10 million and one-fourth of 1 percent on the value in excess of $10 million of the gross estate as finally determined for federal estate tax purposes, is presumed to be reasonable compensation for the attorney for this service. These fees shall include services for routine audit of the return, not beyond the examining agent level, if required.
â€ƒ(f)Purchase, sale, lease, or encumbrance of real property by the personal representative
Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice. Circular 230 Disclaimer: Any information in this answer may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
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Estate Planning Attorney
First-the family could choose and agree on an attorney instead of asking court to appoint one.
The attorney can take assets from estate to pay costs once appointed and get court approval on any fees.
The answer above gives you the statutory fee information.
The answer given does not imply that an attorney-client relationship has been established and your best course of action is to have legal representation in this matter.
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Mr. Pippen offers sound advice. All of these payment amounts and timing should be set in the engagement letter between attorney and client.
Hope this helps.
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LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is email@example.com , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
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