An attorney is entitled to a reasonable fee for handling a decedent’s estate. But, what is reasonable? Certainly, a “reasonable” fee depends on one’s perspective - whether you are the party charging the fee or the party responsible for paying the fee. In any event, many non-lawyers seem to have great concern about the amount of fees an attorney might charge for handling an estate - commonly known as the probate fee. But, is the attorney’s fee something to dread? The issue of reasonableness of an attorney’s probate fee was at issue in this case.
The decedent died with an estate of approximately $1.7 million, consisting of stocks, bonds, real estate, farm equipment and other personal property. Her will appointed a bank as the executor, and the bank hired a lawyer to handle the administration of the estate. The attorney was experienced in probate matters - having drafted about 450 wills and handled more than 170 estates during his lengthy legal career. Near the end of the estate administration process, the executor filed an allowance for attorney fees with the probate court at the maximum specified by Iowa law for most estates - two percent of the gross estate, plus $120. That came to $34,537.80, but the beneficiaries of the estate thought that was too much for the time the attorney had spent on the estate.
The trial court ruled for the attorney and the appellate court agreed. Based on the size of the estate, the assets involved, and the fact that the fee was based on the value of the estate without including a retirement account of $184,000, the court ruled that the fee request was reasonable. The court also noted that the attorney would need to perform legal work on behalf of the estate after the claim for fees was filed up until the estate was closed, and the fee request reflected the time required for that additional work. In re Estate of Herrick, No. 6-323/05-1452 (Iowa Ct. App. Jul. 26, 2006).