Legal fees for probate – Playing it fair

June 19, 2017 Ian Hull Hull on Estates, Joint Accounts, Trustees, Wills Tags: , , , , 0 Comments

Not every estate requires probate, but it’s a near essential for many. And while lawyers retained to undertake the probate process on behalf of estate trustees are entitled to compensation, it must be fair and reasonable in the circumstances.

The main reason to seek probate is to gain the ability to deal with certain kinds of assets or certain kinds of third parties. In particular, if the estate includes real estate that is not held in joint tenancy, probate is usually necessary to transfer title to the property.

There can be a lot involved. The probate process involves a court application and the verification and valuation of estate assets, amongst other things. While it can be a straightforward process for many estates, it can be a complex undertaking in others. For example, the deceased may have owned property that needs an appraisal, or had multiple bank and investment accounts, or owned assets in foreign jurisdictions.

Legal fees will vary

For this reason, it’s never a “one size fits all” approach when determining a fair and reasonable legal fee for the probate process. Because it’s not always possible at the beginning of a matter to determine how long it’s going to take to do the job, many lawyers charge by the hour. However, others charge from 1.5% to 2% of the estate value to obtain probate. In Ontario, that can equal or exceed the probate fee (estate administration tax). While these amounts might also include fees for some of the estate trustee’s work, they don’t always. The courts have taken notice, and are requiring lawyers to have separate files: one for legal work and one for executor’s work. You can find an excellent discussion of these points and others relating to probate costs here: http://www.makeawillcanada.ca/truth-about-probate/.

Avoiding disagreements with beneficiaries over legal fees is important, not only for the administration of the estate but also as a matter of business – a solicitor would not wish to be seen as unfairly charging excessive fees. The way to avoid such allegation is through accurate docketing and providing a paper trail to justify actions taken – including a decision to incur professional fees in addition to any compensation for estate trustee work.

Thank you for reading.
Ian Hull

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