Marc Alexander’s and William M. Hensley’s outstanding blog on California attorney’s fees recently commented on Estate of Fernandez, where Justice O’Leary discussed the difference between “ordinary” and “extraordinary” attorney’s fees in the probate arena.
So, what is the difference between “ordinary” and “extraordinary” attorney’s fees that you pay an attorney to “probate” your loved ones estate?
Let’s take “ordinary” attorney’s fees first. California law sets the maximum amount an attorney may be paid for “probating” an estate (referred to as “ordinary fees” or “statutory fees”) as follows:
- 4 % of the first $100,000 of estate value
- 3 % of the next $100,000
- 2 % of the next $800,000
- 1 % of the next $9,000,000
- ½ % of the next $15,000,000
Let’s take an example. If your parents’ estate (after they have both died) is worth $1,000,000, then the ordinary fee for probating your parents’ estate would be:
- 4 % x $100,000 = $4,000
- 3 % x $100,000 = $3,000
- 2 % x $800,000 = $16,000
Thus, the ordinary fee would be $4,000 plus $3,000 plus $16,000 for a total ordinary fee of $23,000.
“Extraordinary fees” are fees paid to an attorney probating an estate for extraordinary services—that is services that fall outside of the routine services required for a typical probate. Extraordinary fees are based on:
(1) the value of the estate,
(2) the difficulty of the extraordinary tasks performed and time spent,
(3) the results achieved, and
(4) whether those results benefitted the estate.
Most extraordinary fees arise due to probate litigation (i.e., a Will Contest), the sale of real property, or handling difficult tax issues arising in a probate administration.
For example, if a Will Contest is filed by a beneficiary, lawyers will likely be retained to represent the estate and their fees will be paid as extraordinary fees—in addition to the ordinary fees.
If the Will Contest litigation resulted in extraordinary attorneys’ fees of $30,000, then the total attorneys’ fees for the estate could equal $53,000, which is $23,000 for the ordinary fees and an additional $30,000 for the extraordinary fees. Of course the Probate Court would have to approve both the ordinary and extraordinary fees, but it is likely the Probate Court would approve such fees as outlined above.