Pennsylvania estate executors and administrators – known broadly as personal representatives, typically take the same first step when called to administer an estate. They research and find an experienced probate attorney to guide them through the process and establish that attorney’s fees. Why is hiring a probate attorney essential? A personal representative is a fiduciary, owing the utmost care under the law. Breaches of fiduciary duty can result in financial liability to the personal representative. An experienced attorney can ensure the probate process runs smoothly and that all fiduciary duties are satisfied.
As the personal representative, determining the fair cost the estate incurs for attorney’s work is challenging. In Pennsylvania, there is no statutory limit in Pennsylvania on an attorney’s fees when handling estate administration matters. That responsibility is left to the discretion of the personal representative and attorney. But, if an unreasonable fee is suspected, the County Orphans’ Court can review and disallow the fee while, if applicable, imposing sanctions against the lawyer.
Guidance on this issue from the Pennsylvania Supreme Court boils down to a few key considerations. First, and unfortunately broad, the attorney’s fees must be fair and reasonable. Fair and reasonable is viewed in light of the amount of work performed; the character of the services rendered; the difficulty of the problem; the amount of money in question; responsibility incurred, and skill of the attorney. This, for the average person, is not that helpful.
Clearer guidance was issued in a Delaware County Orphans’ Court decision: the Johnson Estate. The judge in Johnson attached the personal fee schedule he used when auditing a lawyers administration fees. While the schedule is not binding, many Pennsylvania lawyers and judges use Johnson as a benchmark for determining appropriate attorney’s fees. (See below).
The table establishes marginal rates for appropriate fees, similar to the federal income tax. Here is a simple example of how the table in Johnson is used:
|1) Estate of $25,000 …||$25,000 @ 7%||= $1,750 acceptable Johnson fee.|
|2) Estate of $50,000 …||$25,000 @ 7%||= $1,750 acceptable Johnson fee|
|$25,000 @ 6%||= $1,500 acceptable Johnson fee|
|= $3,250 acceptable Johnson fee|
This is by no means what an Estate must or should pay. Ultimately, the personal representative and the attorney must decide the fee based on the work involved with that particular estate. Attorney fees can be determined at an hourly or flat rate. The fee agreement should detail the work to be done by the personal representative and the attorney, including the division of responsibilities. The fee should be calculated based on the size of the estate, responsibility incurred by the attorney, the complexity of the estate and experience of the attorney. Each estate is different, understanding the responsibilities of the attorney and their background will ensure you make an informed decision using Johnson as a guidepost.
Attorneys Fees In Pennsylvania
|Min. Marginal Value ($)||Max Marginal Value ($)||% Fee Allowed||Marginal Fee||Total Fee|
|00.01||25,000.00||@ 7%||$ 1,750.00||$ 1,750.00|
|25,000.01||50,000.00||@ 6%||$ 1,500.00||$ 3,250.00|
|50,000.01||100,000.00||@ 5%||$ 2,500.00||$ 5,750.00|
|100,000.01||200,000.00||@ 4%||$ 4,000.00||$ 9,750.00|
|200,000.01||1,000,000.00||@ 3%||$ 24,000.00||$ 33,750.00|
|1,000,000.01||2,000,000.00||@2%||$ 20,000.00||$ 53,750.00|
|2,000,000.01||3,000,000.00||@ 1½%||$ 15,000.00||$ 68,750.00|
|3,000,000.01||4,000,000.00||@ 1%||$ 10,000.00||$ 78,750.00|
|4,000,000.01||5,000,000.00||@ ½%||$ 5,000.00||$ 83,750.00|
|½%||Regular Commission P.O.D. Bonds and Trust Funds||3½%||Transfer Joint Accounts||3½%||Assets Which Are Taxable at One Half Value|
|1%||Non-Probate Assets up to $1,000,000||1%||Non-Probate Assets||Joint Accounts Fully Taxable: Full Commission|
If you need assistance with estate administration, probate or developing your Estate Plan, please call one of our Probate Lawyers or Estate Planning Attorneys for a free consultation. We have Estate Planning Attorneys in New Jersey, Pennsylvania, New York, Minnesota and Florida.
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