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When a loved one passes away in Texas, their estate often needs to go through the probate process. Probate is the legal process of validating the deceased person’s will, inventorying their assets, paying off debts and taxes, and distributing remaining assets to heirs.
It can be a complex and time-consuming process, especially for larger estates. That’s why most people hire a probate attorney to guide them through it. But who is responsible for paying the probate attorney fees in Texas? Let’s take an in-depth look.
The Estate Generally Pays Probate Attorney Fees
In most cases in Texas, the deceased person’s estate is responsible for paying the probate attorney fees. These fees are considered administrative expenses of the estate, similar to court filing fees, appraisal costs, and executor compensation.
The estate executor, also called the personal representative, is in charge of hiring the probate attorney and paying their fees from estate funds. The money to pay these fees typically comes from the deceased’s checking or savings accounts. If those accounts don’t have sufficient funds, the executor may need to sell estate assets like stocks, bonds, real estate ,or personal property to cover the probate costs.
Why the Estate Should Pay
It makes sense for the estate to bear the cost of probate attorney fees for a few key reasons:
- The probate process is carried out to settle the estate’s affairs. Validating the will, cataloging assets, paying creditors, filing taxes – all of these probate tasks are done on behalf of the estate, not for the personal benefit of any one individual. Thus, the estate should foot the bill.
- Using estate funds ensures heirs and beneficiaries are treated fairly. If individual heirs had to pay probate fees out of their own pockets, it could create an undue burden on some and lead to resentment and conflict. Paying from the estate ensures costs are shared equitably.
- Most wills include provisions directing the estate to pay administrative costs, including attorney fees. Following the terms of the will is part of the executor’s fiduciary duty.
Executor’s Responsibility to Manage Probate Costs
As the person in charge of managing the estate, the executor has a fiduciary duty to spend estate money responsibly. This includes monitoring probate attorney fees to ensure they are reasonable and necessary.
Some best practices for executors when it comes to probate attorney fees include:
- Getting fee estimates from multiple attorneys before hiring one
- Asking for a detailed fee agreement and having the attorney explain their billing practices
- Requesting regular invoices and asking questions about any line items that seem unusual
- Avoiding agreeing to work or fees that seem unnecessary for the size of the estate
- Pushing back on the attorney if fees seem to be getting out of hand
The executor can be held personally liable if they allow the probate attorney to charge unreasonable fees or perform unnecessary work. Heirs can sue the executor for breaching fiduciary duty if they believe estate money was wasted on legal fees.
Factors That Affect the Amount of Probate Attorney Fees
Not every estate incurs the same amount of probate attorney fees. Some key factors that influence the total legal bill include:
- Size of the estate: Larger, high-value estates usually require more legal work than small, simple ones. More assets mean more things to appraise, track down, transfer and report to the court.
- Complexity: Estates with numerous creditors, out-of-state property, feuding heirs, ambiguous will terms or other complicating factors require more legal legwork to settle. The attorney will need to put in more hours.
- Whether the will is contested: If an heir challenges the validity of the will, the executor will have to defend it in a lawsuit. This can greatly increase probate attorney costs as compared to an uncontested will.
- Need for tax planning: Estates that are large enough to trigger estate tax will require specialized tax counsel and strategy. This typically comes with higher attorney fees.
Executors should discuss these factors with the probate attorney at the beginning of the engagement. That way, expectations around fees are clear and the executor can make an informed hiring decision.
Limitations on Probate Attorney Fees
While the estate is expected to pay reasonable attorney fees, there are some limitations in place to prevent executors from spending estate money recklessly:
- Texas law requires probate attorney fees to be “reasonable” given the size and complexity of the estate. Executors can’t agree to exorbitant hourly rates.
- The executor must be prudent in managing estate funds. Agreeing to unnecessary legal work or overpaying the probate attorney could make the executor personally liable.
- If heirs or beneficiaries feel the attorney fees are unreasonable, they can challenge them in probate court. The court will review the fees and make a determination.
- Some wills place specific limits on how much can be spent on attorney fees. The executor must abide by the terms of the will.
How Probate Attorney Fees Are Calculated
Most probate attorneys in Texas charge by the hour. Typical rates range from $250 to $400 per hour, depending on the attorney’s experience level and the complexity of the estate.
Some attorneys charge a flat fee for very simple estates, such as those that qualify for muniment of title or small estate affidavit procedures. However, attorneys rarely work on a flat fee basis for more complex estates that require a full probate proceeding since it’s difficult to predict at the outset how many hours of work will be needed.
Executors should be sure they clearly understand the attorney’s fee structure before hiring them. The fee agreement should be spelled out in the attorney-client contract.
What About Executors Paying Up Front?
In rare cases, the estate may not have enough liquid cash to pay the retainer fee most probate attorneys require. If that happens, the executor may choose to pay some attorney costs out of their own pocket and then reimburse themselves from the estate once assets are sold.
However, executors should be very cautious about paying personally for estate expenses. If the executor reimburses themselves improperly or for an unreasonable amount, they could have legal trouble with heirs and creditors. Getting an attorney or court permission before paying estate expenses with personal funds is best.
Are There Any Exceptions?
The main exception to the estate paying probate attorney fees is if the will clearly directs otherwise. Rarely, a will might instruct certain heirs to pay probate costs or direct that fees be paid from a specific source, like a trust.
Texas intestacy law requires the estate to pay probate attorney fees as an administrative expense in the absence of a will. The only way around this would be for all heirs to agree amongst themselves to pay fees privately, which is unlikely.
Another uncommon exception is if the executor acts egregiously and the court finds them personally liable for attorney fees as a penalty. For example, if the executor commits fraud or willfully mismanages the estate, the court could order them to pay legal fees rather than the estate. However, this is very rare.
What if the Estate Lacks Sufficient Funds?
In some cases, the estate may lack enough money to pay all of its bills, including probate attorney fees. When an estate is insolvent, meaning its debts exceed its assets, Texas law sets out a priority order that guides who gets paid first from the limited funds.
Under Texas Estate Code section 355.102, probate attorney fees are classified as “Class 2” claims, along with ordinary administrative expenses. This means after Class 1 claims like funeral and burial expenses are paid, the probate attorney is entitled to payment before most other unsecured debts and creditors.
If there is not enough money for the probate attorney to be paid in full, they may have a few options:
- Agreeing to a reduced fee and writing off the remainder
- Working out a payment plan to be paid over time as assets are liquidated
- In rare cases, pursuing collection against the executor personally if there is evidence of misconduct
Executors should be upfront with the attorney about the estate’s financial status. If funds are limited, it’s better to discuss options early in the process rather than letting unpaid legal bills pile up.
Conclusion
In nearly every Texas probate case, the estate is responsible for paying the attorney fees. Executors should hire an experienced probate attorney and pay their reasonable fees from estate funds as part of the cost of administering the estate.
Heirs concerned about high attorney fees should understand that fees must be reasonable and are subject to court approval if challenged. Executors must manage estate money prudently and avoid overspending on legal costs.
For most families, paying probate attorney fees from the estate is the fairest, simplest approach. Executors should not pay personally unless absolutely necessary, and even then only after getting permission. Following these guidelines will help ensure the probate process goes smoothly and all parties are treated fairly.
Other Related Articles:
- What in a Will Goes to Probate in Texas, and What Does Not?
- What is a CSZ Probate in Texas? Understanding the Process
- What Court Probate in Texas Is: A Comprehensive Guide
- What Happens If You Don’t Probate a Will in Texas? A Comprehensive Analysis
- Do You Have to Probate a Will in Texas? A Comprehensive Guide
- Does a Surviving Spouse Need Probate in Texas?
- How Much Does Probate Cost in Texas? Avoid Costly Surprises
- How Long to Probate a Will in Texas: A Comprehensive Guide for Executors
- What questions should you ask a probate lawyer?
- Which Property Should Be Included In Texas Probate or Intestate
FAQs
Most probate attorneys in Texas charge an hourly rate between $250 and $400 per hour. Rates depend on the complexity of the estate and the attorney’s experience level. For very simple estates, some attorneys will charge a flat fee rather than hourly.
If the estate is insolvent, meaning there is not enough money to pay all creditors, Texas requires attorneys to be paid after funeral expenses and administration costs but before most other debts. If there is truly no money, the attorney may agree to a payment plan or pursue other collection remedies against the executor or heirs.
Executors are entitled to reasonable compensation in Texas. However, they can’t just pay themselves a salary from estate funds without oversight. Executor compensation must be approved by the probate court as part of the estate accounting. If the will specifies an amount the executor should be paid, the court will usually approve that amount unless an heir objects.
In Texas, heirs have the right to challenge probate attorney fees if they believe they are unreasonable or unnecessary. The heir would need to file an objection with the probate court and present evidence at a hearing. If the court agrees the fees are too high, it can order the attorney to refund some of the fees back to the estate. However, courts are often deferential to the executor’s choice of attorneys absent clear evidence of misconduct.
