What happens to the soul of a person after death remains the great unknown. What happens to the worldly goods left behind – and titled solely in their name – is no mystery. Those items become their estate. Through his or her will, the person bequeaths the estate to beneficiaries and names a person to take on the task of managing the estate and carrying out the terms of the will. That individual is known as the executor or personal representative. The process of “proving” the will in court is known as probate.
The Personal Representative
If you have been named the personal representative of the estate of a deceased Maryland resident – the decedent – you have considerable responsibility. Your duties include opening the estate, inventorying assets, filing the decedent’s final federal and state tax returns and an estate tax return, verifying and paying creditors, locating and notifying beneficiaries, reports such actions to the court – the list goes on. When debts and taxes are paid, the personal representative can then distribute the assets to beneficiaries and close the estate.
Maryland allows modified administration for estates with few heirs or assets, and the personal representative of such an estate may not need the services of an attorney. Unless an estate is very small and simple, you will need to hire an estate attorney to help you through this complicated process. Hiring the attorney – and other necessary professionals, such as an accountant, appraiser or real estate agent – is part of the personal representative’s job. The probate lawyer is the personal representative’s attorney. He or she is not representing other heirs to the estate.
Probate Attorney Fees
Maryland statutes spell out the fees and commissions estate attorneys may receive for normal administrative tasks. Any fees above the maximum permitted amount require approval by the Orphan’s Court, the rather archaic name for the probate court dating back to colonial times. Fees within the standard range do not require court approval if all interested parties consent.
The state formula for attorney compensation is 9 percent of the first $20,000 of the gross estate and 3.6 percent of the amount over $20,000. For example, the standard attorney fee for an estate valued at $1 million is $37,080. That breaks down to $1,800 for the first $20,000 at 9 percent, and $35,280 for the remaining $980,000 at 3.6 percent. All such fees are paid by the estate.
The state formula is not the only option. Attorneys may also charge by the hour, and this arrangement is more efficient for many estates and personal representatives. Expect to pay between $250 and $350 per hour if choosing this fee schedule. If the estate is relatively straightforward and all assets are left to a spouse or evenly divided among children, the attorney may charge a flat fee.
Probate Administration Fees
Under Maryland law, probate administration fees are based on the total gross estate. For example, an estate valued at a minimum of $250,000 but less than $500,000 must pay $500 in fees, while an estate worth at least $500,000 but less than $750,000 owes $750. An estate worth $2 million but less than $5 million pays $2,500. Estates worth $5 million and up pay a $2,500 fee plus 0.2 percent on any excess over $5 million.
These fees don’t include additional Letters of Administration, certified mail fees, filing a will for safekeeping, entering claims or caveat papers and plain, certified or exemplified copies.
Attorney expenses not considered part of normal estate administration include:
- Copying and printing expenses
- Automobile mileage
- Court filing fees
- Bond premiums
- Messenger services.
Common tasks falling outside the scope of normal estate administration but often undertaken by the probate attorney for additional fees upon request of the personal representative include:
- Leasing or sale of estate property
- Appearances before planning or zoning boards
- Recovering assets belonging to the estate held by another party
- Defense of tax audits
Most estates are settled within a year to 18 months of the probate filing, and the beneficiaries receive their inheritances. However, there are exceptions. While will contests are standard fare in TV dramas, they don’t happen that often in real life. That doesn’t mean they can’t happen, and the attorney must defend the estate against relatives either left out of a will or unsatisfied with their allotted portion. These relatives may also try to remove the personal representative and have another person or fiduciary become the executor. Creditors may attempt to defraud the estate by submitting inflated or false invoices. Any type of dispute not only lengthens the amount of time before the estate is settled, but increases attorney fees.
In many of these situations, litigation is necessary, and these fees do not fall under “normal administrative tasks.” Remember that the attorney represents the personal representative and therefore the estate, not any disgruntled relatives. Fortunately, most parties agree to settle, since the cost of litigation is so high. An attorney’s estate litigation fees do not require court approval under a contingency fee agreement signed by the decedent or the personal representative, or a previous personal representative. However, such fees cannot exceed the contingency fee agreement, and that agreement must be on file with the Register of Wills. The attorney must make clear when filing each account that this representation does not involve administration of the estate.
The Bottom Line
The personal representative named in a loved one’s will is dealing with estate issues in the midst of grieving. It’s especially difficult if the decedent did not leave their affairs in order. In many circumstances, the personal representative is thrust into a situation where he or she must run or sell a decedent’s business, hunt for financial documents, deal with tenants or landlords and try to keep other relatives from absconding with valuables. The fees for hiring a probate lawyer to get the estate on track are well worth it.
If you are in Maryland and are looking for an estate/probate attorney, we encourage you to reach out to our firm, Blackford and Flohr, today. We have years of experience handling these issues and can help get your affairs in order.
Maryland Probate Fees
RULE 6-416. ATTORNEY’S FEES OR PERSONAL REPRESENTATIVE’S COMMISSIONS
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