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PA: why are estate fees paid for non probated assets? and other questions


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friends hubby died with no will and ive been trying to read up/learn about probate etc. she went to one atty and it took 3 months to get her a retainer agreement but i read through it and it says he gets 2 percent of non probate assets. that seems insane for doing virtually no work. the house isnt probate and is worth over 300K so he gets 6k for what? no need to change the deed etc. or for accounts that had beneficiaries and she already has moved the money to her name, why does he get 2% of that for doing nothing but listing it on a form?.

 

even for basic things like the 3 or 4 stock accounts that need to be put thru probate, friend will be the one making calls and doing all the work. so if there was like 500K in 4 stock accounts, the atty gets a crazy amount of money using the schedule they call the johnson scale. it would be over 10K fee he gets when shes the one doing the work to move the 500K.  i know there are forms to file and pa tax return to do but using all the percentages listed on the standard scales and retainer,  he would get over 55K of the estate.

 

unless the atty can move all that money and do all that stuff but i dont think thats how it works? certainly isnt worth 55k!

 

i told her go see another atty and agree to an hourly rate. even at 400 per hour i think she would make out just fine. or we could do it ourselves even. once she has the short certifcate and opens the estate account and moves all that money the only thing left to do is file the taxes and she could pay an accountant to do that.

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So, I've inserted a copy of the Johnson Fee Schedule below.  It's typically used by courts where there's a dispute about fees that are being charged to an estate and are considered reasonable.

 

However, an estate agreement can enter into whatever terms are agreeable to the parties involved.  It can be assumed that these fees assume largely probated assets and that the executor does most all the footwork involved (such as asset transfers).  The the workload can be expected to be lighter, it's reasonable to assume that an executor would agree to reasonably "lighter" fees.

 

An hourly rate contract may seem preferable, but even under the best of circumstances, settling an estate may require more time than anticipated.  The benefit of an agreed flat rate means that there are no surprises and the executor has every incentive to move things along.

 

Your example outlining a $55k fee for handling $500k in securities seems outsized.  Assuming a $10k flat fee to start, and $18k fee for $500k under the table below ($9k on the first $200k, + 3% x residual $300k), the suggested fee is $28k.  And, yes, as estate executor I would expect him/her to handle every step of the estate liquidation, without exception.

 

Because each executor can exercise discretion in fees, it's absolutely advisable to seek out at least 2 alternate proposals.  I suggest she have a thorough discussion with each, detailing the steps as well as the hazards if shortcuts are taken.  (There's likely good reason to be wary of a low bid.)

 

 

 

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to be clear the executor is the wife and she will take no fees because she gets all the money in the end. so by your statement above it seems you agree since the executor is doing al the work theres no way atty should get 55K

 

its the atty fees that i have serious issue with.  there are additional things i didnt mention above and i dont even know them all but i know there's a 300K account at etrade. she did the calculation based on all the probate and non probate things according to the atty schedule and she said it was 55K in fees.

 

plus why does an atty get 2 percent of the stuff that is NON probate. that seems nuts. there has already been a few hundred K that wife moved already because the companies do that with just the death certificate. so wife did the work , the money is moved into her name and the atty gets 2 percent of those few hundred K. its bizarre.  and home being worth 300K and atty gets 6K for what. i really would like to know if people pay this kind of money for atty doing literally nothing. the house can stay in her name till sold, will be zero issues. plus a new deed is like 200 bucks maybe. not 6000! no wonder people say attys are crooks.

 

plus even for the probate mutual fund/stock accounts, what exactly does an atty do to earn even the 28K in your calculation above. i know you have to place ads in the paper and file tax returns but thats not 28K. i told her she needs to meet with the atty or new one to find out what they do to earn all that money.  or just find one that will do it hourly because its been a while since death and wife has done lotta work already for 'free'. and she will continue to all all the legwork moving assets. not some atty.

 

she is just furious that she did all this work and now atty wants to get fees for stuff she has and will continue to do.

 

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since i have very little experience with attys, is it normal to take 3 months to get a fee schedule out? just was bizarre that she met him in september and just got the fee schedule in the past week. i worry his timeliness on other matters may be reflective of this as well. i would have thought attys want to get a client signed up and paid within a week after meeting them. maybe his workload is too much but you really cannot ask that can you? something is just bizarre about that fact alone.

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