Who Pays Probate Attorney Fees in New York City

Probate attorney fees, as a general rule, are paid by the estate. However, in terms of practicality, an executor or administrator initially pays for the probate attorney’s retainer fee in order to begin the process of probate.

The Probate Process

The probate process is usually initiated either by a petition for administration or petition for probate. If the deceased died without a will, the closest living relative will file a petition for administration. If the deceased died with a will, the nominated executor will file a petition for probate.

At this stage of the process, there is still no estate that has been formed. For this reason, the proposed administrator or executor will usually pay the probate attorney’s retainer fee first, which they can then reimburse from the estate once the estate is formed. The retainer fee (usually starting at about $5,000 and going up to $10,000+) is a deposit that the probate attorney will request from the client, and where the probate attorney’s fees for his work are charged.

Once the probate attorney obtains the letters of administration or letters testamentary for the estate, the administrator or executor can already begin gathering the assets of the estate and consolidating them in the estate bank account. This then allows the administrator or executor to pay the probate attorney’s fees from the estate assets.

Percentage Fee

Some attorneys can take a probate case on a percentage fee, typically about 5% of the estate.

The Contingency Fee

In rare cases, an attorney may offer a contingency fee in a will contest case (not a probate case) Under a contingency arrangement, the client does not pay the probate attorney’s fees, but in case the probate attorney is successful in obtaining a favorable judgment or settlement, the probate attorney will be entitled to a success fee, which is a percentage of the amount received (usually 1/3), on top of its attorney’s fees.

Court Approval for Attorney Fees

Disputes can arise regarding the amount of attorney’s fees charged in an accounting proceeding. When objections are made, the probate attorney may be required by the court to submit an explanation regarding his fees. The question of the reasonableness of the probate attorney’s fees are then submitted to the court for the court’s approval.

The probate attorney’s fees are generally paid for by the estate. However, due to practical reasons, the initial retainer fee is usually paid out-of-pocket by the proposed administrator or executor. The probate attorney can also charge a percentage of the estate. In rare instances of will contests, the probate attorney may offer to charge a contingency fee, typically when there’s a situation where there’s a will contest and there is risk involved. The rates of the probate attorney will depend on the expertise of the attorney and the fee arrangement between the attorney and the client.

Should you need a probate attorney, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].

The Reimbursement Process

When the executor or administrator initially pays the attorney's retainer out of pocket, the payment is treated as an advance to the estate that will be reimbursed once the estate has accessible funds. The mechanics:

1. The executor pays the retainer from personal funds at the start of the engagement.
2. The executor obtains letters and opens an estate bank account.
3. The executor transfers estate funds to the estate account.
4. The executor reimburses themselves the retainer from the estate account.
5. The reimbursement is documented in the estate's records and disclosed in the eventual accounting.

This process is standard. Beneficiaries who later review the accounting see the reimbursement and understand that the executor advanced funds for legitimate estate expenses. Documentation matters — the retainer agreement, the bank records showing the payment and the reimbursement, and any related correspondence should all be retained.

Estimating Attorney Fees Before Engagement

One of the most useful things to do at the first consultation is to obtain an estimate of total attorney fees for the engagement. The estimate depends on:

• The complexity of the estate (assets, beneficiaries, anticipated issues).
• The expected timeline.
• The fee structure (flat, hourly, percentage).
• The hourly rates of the attorneys who will work on the matter.
• The expected work product (court filings, accountings, communications).

Most attorneys can provide a rough estimate for routine matters. For complex or contested matters, the estimate becomes less reliable but should still give the client a sense of the order of magnitude. Asking for an estimate and discussing it openly is part of selecting the right lawyer.

When Fees Become Disputed

Fees can become disputed in several ways:

Between the executor and the attorney. The executor objects to specific charges on a bill, believes the work was inefficient, or disagrees about scope of representation. These disputes are typically resolved through discussion or, if necessary, through the bar association's fee dispute arbitration program.

Between the estate and the attorney. Beneficiaries object to the fees being paid from the estate. The objections come through the accounting process. The court reviews the fees and either approves them, reduces them, or directs further information.

Between the attorney and the family generally. Sometimes family disputes spill over into questions about the attorney's role and fees. These can be especially complicated because the attorney represents the executor (not the beneficiaries directly), but the beneficiaries pay through the estate.

The Reasonable Fee Standard

Whatever the fee structure, the ultimate test is reasonableness. The court evaluating fees considers:

• The size and complexity of the estate.
• The skill required for the work.
• The customary fees in the area for similar work.
• The time spent and the value of the services.
• The results achieved.
• The attorney's experience and reputation.

Fees that look reasonable on their face but fail the reasonableness test under these factors can be reduced. The reduction comes out of the attorney's pocket — the estate is not asked to pay more than the reasonable amount.

Strategies to Manage Fees

Executors can manage attorney fees through several practical approaches:

• Do non-legal work yourself. Collecting and organizing documents, communicating with banks for routine inquiries, and similar administrative work can be done by the executor without attorney involvement.
• Batch your questions. Rather than calling the attorney every time a question arises, accumulate questions and address them in a single consultation.
• Use email for non-urgent matters. Emails are typically less expensive than phone calls because they take less time.
• Provide complete information. Attorneys spend time chasing missing information. Providing everything at once reduces this time.
• Make decisions promptly. Cases stall when clients defer decisions, and the stalled time adds to the cost.
• Engage paraprofessionals where appropriate. Some work can be done by paralegals at lower hourly rates than attorneys.

Fees in Contested Estates

Contested estates generate substantially higher attorney fees than uncontested ones. Litigation involves depositions, motion practice, discovery, hearings, and possibly trial — all of which consume significant attorney time. The fees can run from tens of thousands of dollars in moderately contested cases to hundreds of thousands or more in heavily contested ones.

Contested fees are subject to the same reasonableness standard. They are also sometimes subject to fee-shifting — in specific circumstances, one party may be ordered to pay the other party's fees. Common scenarios for fee-shifting include sanctions for frivolous litigation and recovery from a fund created by successful litigation.