Law Offices - Kenneth D. Sisco, Attorney - Personal Information
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Second Guess Your Attorney So You Don't Get Ripped OffIf everyone took my advice and established a revocable trust, there would be no such thing as probate, and the following would be unnecessary. But alas, hardly anyone takes my advice, so chances are very good that sometime in your life, you will be called upon to administer the probate estate of a parent or loved one. Every client has the right to expect his attorney to be on his side.
Unfortunately, it doesn't always work that way, especially in the area of
probate. Not too long ago, a prospective client came to me for a second
opinion. She was the executor of her mother's estate, which had as its sole
asset, a twenty acre piece of raw land in I was appalled and outraged. The Court was not nearly as appalled and outraged as I was, but upon our filing an objection to the attorney's accounting and request for fees, the Court reduced the award of attorney fees to $8,533.50, a savings of about $10,000 to the estate. When dealing with an attorney, the first line of defense is always to
understand how the game is played. Just as with a medical doctor, you must
ask your attorney to explain what he is going to do and why. If what he tells
you does not make sense, get a second opinion. Of utmost importance is to ask
him how he establishes his fees. The first area of abuse is to include items in the estate that are not subject to probate. I have heard of attorneys including joint bank accounts and real property held in joint tenancy in the probate estate. Neither of these items are subject to probate, and the attorney is not entitled to a fee based on their value. But if no one objects, the Court is not likely to pay any attention. Another area of abuse comes into play in appraising the property. The estate property should be appraised at its fair market value, as of the date of death, and then adjusted to reflect gain or loss on any sale that has occurred. In the above example, the property was worth only $70,000 on the date of death; but the attorney did not have the property appraised until five years later, when the probate referee appraised it at $550,000. Since the probate referee's fee is one percent of the appraised value, the probate referee was glad to find the value as high as possible. The attorney asked the Court to compute his fee on the full $550,000 appraisal; his fee should have been based on the $300,000 sales price. Finally, extraordinary fees should be watched very carefully. In the case being discussed, the attorney wanted his ordinary fee, based on the value of the estate; but he also wanted to charge an "extraordinary fee" for managing the sale of the real property. Since the real property was the only asset of the estate, this request was outrageous. Moreover, practically everything the attorney did, could have been, and should have been done by the Realtor in earning his $22,000 commission. The best way to avoid all of these sorts of problems is to see to it that the estate never goes into probate in the first place. Of course, when you are up to your backside in alligators, it isn't productive to dwell on the fact that you should have drained the swamp. You must deal with the problem as best you can. First, be sure you have an attorney that you can trust. Then be sure that you understand how he is to be paid. This is always of paramount importance. For example, if you have an attorney that tells you that a trust wouldn't do you very much good, ask him to explain how his fee for preparing a trust would compare with his fee for representing the administrator of your probate estate. Second, try to find an attorney that you trust, that will base his fee on the amount of work done, and not according to statute. Don't be surprised if you have difficulty in finding one. After all, attorneys make the laws; it is not surprising that they will take advantage of those laws. Finally, seek to understand. The procedures for taking an estate through probate are sometimes tedious and complicated; but the basic strategies and goals are not beyond the layman's comprehension. If from the beginning you make it clear to the attorney that you are interested in what is going on, and you will be paying attention to what he is doing, the chances of his taking undue advantage, will be greatly reduced. Copyright; 1997 |
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