Q: Is it customary to pay to an estate attorney 70% of his fee's (3% of the estate) based on the appraised value of a home?
58% of the total estate value (based on the attorney's appraiser) is a condo in a development that has not had a sale in 3 years.
Our concern is the condo's APPRAISAL, and therefore the estate, is being over valued?? Should the attorney be paid now based on a potentially UNREALIZED APPRAISED value? I completely understand paying him on the cash assets but I do not know the real market value of the condo.
A:
While the 3% you reference is generally a statutory acceptable sums, see the statute below and read through the statute as this is just a small portion of it here; Florida Statute 733.6171
(3) Compensation for ordinary services of attorneys in formal estate administration is presumed to be reasonable if based on the compensable value of the estate, which is the inventory value of the probate estate assets and the income earned by the estate during the administration as provided in the following schedule:
(a) One thousand five hundred dollars for estates having a value of $40,000 or less.
(b) An additional $750 for estates having a value of more than $40,000 and not exceeding $70,000.
(c) An additional $750 for estates having a value of more than $70,000 and not exceeding $100,000.
(d) For estates having a value in excess of $100,000, at the rate of 3 percent on the next $900,000.
(e) At the rate of 2.5 percent for all above $1 million and not exceeding $3 million.
(f) At the rate of 2 percent for all above $3 million and not exceeding $5 million.
(g) At the rate of 1.5 percent for all above $5 million and not exceeding $10 million.
(h) At the rate of 1 percent for all above $10 million.
(4) In addition to fees for ordinary services, the attorney for the personal representative shall be allowed further reasonable compensation for any extraordinary service. What is an extraordinary service may vary depending on many factors, including the size of the estate.
Attorney fees can also be determined by hourly fee agreement or flat-fee agreement and so forth, so it varies from law office to law office. Also, Homestead is not included in the value of the probate.
If you have not yet secured your attorney, you may want to ask and shop around, if you already have, you should present them with your concerns about the valuation of the property/inventory which fees may be based upon.
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