How Do Michigan Probate Attorney Fees Get Paid?

How Do Michigan Probate A…

When a loved one passes away, money is the last thing you want to be thinking about. Everything from final expenses to outstanding credit cards may have to be paid, and then there are the legal fees. Find out how Michigan probate attorney fees get paid, and whether you will be on the hook for your loved one's legal expenses.

In this blog post I will review the laws applying to how Michigan probate attorney fees are paid. I will address executor and personal representative compensation, administration costs, and related fees the estate will have to pay. I will also explain how an estate administration attorney can help minimize those costs.

What Do Estate Administration Attorneys Do After a Loved One's Death?

When a loved one dies, a relative or trusted friend is generally named the will's executor or the personal representative of the estate. It is that person's responsibility to oversee estate administration and make sure everyone gets the money or assets to which they are entitled. If your relative's estate is large, or includes many creditors, the work can become overwhelming quickly. A Michigan probate attorney can help you administer the estate. That includes:

  • Creating an inventory of the estate's assets and debts
  • Paying outstanding bills
  • Establishing the value of the homes, vehicles, jewlery, and other property within the estate
  • Filing the appropriate paperwork and appearing in probate court
  • Addressing and resolving any disputes that arise between relatives or other beneficiaries
  • Distributing any inheritance to named beneficiaries

Attorneys are entitled to charge a reasonable fee for all work performed. Depending on the size and complexity of your loved one's estate, you can expect to incur several thousand dollars in Michigan probate attorney fees. But the money for that bill doesn't come out of the administrator's pocket.

How Do Michigan Probate Attorney Fees Get Paid?

Michigan probate attorneys and estate administrators are entitled to reasonable compensation for the time and effort it takes to administer an estate. Depending on the circumstances of your case, these fees will likely be paid on an hourly basis.

Michigan law does not allow probate lawyers to enter into contingency fee agreements (where the amount paid is based on the value of the assets) in estate administration matters. However, if an attorney represents the estate in another type of case, such as a wrongful death case or personal injury lawsuit, proceeds from that suit can be used to pay probate costs and attorney fees.

What Other Costs Come Out of An Estate?

After a loved one's death, many personal representatives don't realize just how many bills, fees, and costs must be paid out of their family member's estate. Before the beneficiaries receive their inheritances, the probate court and your estate administration attorney will make sure the estate pays for:

  • Court costs based on the size of the estate (known as the inventory fee)
  • Probate attorney fees and personal representative reimbursement and fees
  • Bills of realtors, appraisers, and other professionals hired to establish the value of estate assets
  • Final expenses including reasonable funeral and burial costs
  • Homestead and family allowances paid to the deceased's surviving spouse and dependents
  • Unpaid taxes in the deceased's name
  • Medical assistance benefits repayment from a special needs trust
  • Reasonable and necessary medical expenses from the deceased's final illness
  • Unpaid creditors including a mortgage, auto loan, credit cards, or other bills
  • Fees earned by the personal representative
  • Estate taxes

Once all those expenses are paid, the rest is distributed to the beneficiaries named in a person's will.

Will Michigan Probate Attorney Fees Cut Down on Beneficiaries' Inheritances?

Since Michigan probate attorney fees are paid before the beneficiaries receive their inheritances, you may be concerned that hiring an estate administration attorney will cut into the money your loved one's family receives. It is true that attorney fees come out of the same pool of money and assets as inheritance. However, an estate administration attorney is often able to take advantage of informal probate proceedings and negotiate with creditors on behalf of the estate to make the most of those funds. In addition to saving a personal representative time and trouble, hiring a lawyer can often reduce the amount your loved one's estate pays to debt collectors or the state.

Rebecca J. Braun, J.D., is an estate planning and elder law attorney for Mobile Legal Services in Southeast Michigan. She can help with estate and trust administration. She will travel to clients, free of charge, in Livingston, Oakland, Washtenaw, Wayne, and Southern Macomb Counties. Contact us for an initial assessment.

Categories: Probate