My Stepsister’s attorney charged 40%. The house sold for $500,000.00. Yet he is receiving 40% of the gross value of the house which is $820,000.00.
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My Stepsister’s attorney charged 40%. The house sold for $500,000.00. Yet he is receiving 40% of the gross value of the house which is $820,000.00.
Is this practice normal? I don’t understand how he is paid based on the gross value of the house and not the actual sale price? Is this legal? Is there any recourse? I am totally baffled that anyone beside the family should recieve most of the money! 40% is more than most get, but, how is it that he gets most of everything??????
Asked on June 27, 2009 under Estate Planning, California
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Hello. Your question is a little confusing and you may want to re-write it and send it again. Is the attorney doing the Probate of the Estate, including the closing for the sale of the house? Fees for the probate of an estate are set by statute in California. They are a percentage of the Gross Estate and are as follows according to Internet research:
Gross Probate Estate excludes assets held in a manner which avoids Probate. [Excluded from Probate are assets held in a Living Trust, or by Joint Tenancy, Life Insurance payable to a beneficiary other than the estate, Retirement Plans, and any other "pay on death" assets.]
The Gross Probate Estate is the total value of the estate BEFORE reduction for debts. If a house is worth a million bucks, but it has a mortgage of the same amount, there is no value to anyone but the lawyer, who gets a $23,000 Probate Fee.
The new 2002 percentages are:
| first $100,000 | 4% = | $4,000 |
| next $100,000 | 3% = | $3,000 |
| next 800,000 | 2% = | $16,000 |
A $1,000,000 gross value estate is worth $23,000 in fees to a lawyer who charges the Statutory Fee, even if the net value of the estate is worth a lot less after reduction for mortgages and other debts. If there are "complications," extra fees are allowed, with Court approval which is routinely granted.
Things as you wrote them sound a bit odd. You should seek an attorney yourself for consultation. Try here at attorneypages.com for starters.
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