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Can Probate Fees be Paid from the Estate?

 

Many people balk at the price tag of valuable attorney assistance in administering an estate. A good attorney’s expertise is never cheap and often in the case of a will contest or contested estate, legal fees mount quickly for everyone involved. The good news is that, in many cases, probate fees can be paid from the estate. Whether your fees are recoverable depends on who you are in relation to the estate.

What is an “Estate”?

The basic definition of an estate in the context of probate and administration is the collection of things a person who died left behind which are subject to the probate court’s jurisdiction. Estates often, but not always, include houses, checking and savings accounts, retirement accounts, pensions, life insurance policies, pets, and other personal property.

Sometimes, a person’s estate planning works in such a way to completely bypass probate. In most cases, however, there is at least one asset that requires the probate court’s involvement, and that asset is usually included in the estate.

Personal Representative’s Fees

A personal representative, or executor, is the person who takes charge and administers the estate for the benefit of heirs or devisees (someone who receives a benefit from the estate either in the case of intestate succession or if there is an accepted will). Many times, a personal representative is also connected to the estate in some way as an heir or devisee, but that is not always the case.

A personal representative’s reasonable costs of administering an estate are almost always recoverable from the estate. A personal representative represents the estate so their reasonable costs are, in many ways, considered estate costs.

If you are the personal representative, your reasonable costs of administration—including fees for the actual probate of the estate plus, in most cases, attorney fees for the personal representative—are recoverable from the estate. Those reasonable fees and costs of administering the estate come out before any distribution to heirs or devisees.

Respondent, Ward, or Protected Person

A person that falls into the above categories can hire an attorney to represent them in relation to an estate and have the fees for that representation reimbursed from the estate. This is not the most common way to get probate fees paid from the estate because most people do not fall into one of those categories. 

Court-Appointed Third Parties

In some cases, heirs or devisees begin a will contest before a personal representative can be appointed. In these cases, a court often must appoint a special administrator to temporarily administer the estate. This often happens when there are assets that must be addressed quickly, like a house that has a reverse mortgage on it, or extremely aggressive creditors that are threatening to repossess an asset.

If a court appoints a special administrator or any other third party to do something for the estate administration process, that person is entitled to reasonable compensation for their time and effort. 

A special administrator functions as a temporary personal representative and performs all the tasks a personal representative would for the estate, but on a temporary basis. This includes listing and selling property, creating inventories, opening estate accounts, and transferring estate property. 

Any Person Who Benefits the Estate

Colorado law has a special provision that allows a person to recover costs and attorney fees if they provide services resulting in an order beneficial to the Estate. C.R.S. § 15-10-602(7)(b) says that a court may pay costs and attorney fees if that work resulted in a benefit to the estate.

To get fees due to benefitting the estate, that seeker of fees must provide the court information that allows the court to decide if the estate received a beneficial order from the services. If the court concludes that the services resulted in a beneficial order, the seeker submits only those fees or costs that were expended doing the beneficial service.

These requests for compensation must be made within thirty-five days of the order that benefits the estate (or more or less time at the court’s discretion) and the requests are open to objection. 

Are Probate fees still Recoverable if I lose?

As long as a proceeding moved forward in good faith, whether it was successful or not, the right to compensation for costs does not change. In a word, yes, but the proceeding that was put forth had to be done in good faith.

If someone brings a proceeding in bad faith, the court can assess fees and costs against that person. 

How are Fees Paid?

Personal representatives and their attorneys, attorneys for wards or protected people, and third parties who perform services by request of the court can be paid without a court order. The Court still has to monitor the reasonableness of the attorney fees or costs, but if you fall into one of the three categories above, your reasonable fees are recoverable directly from the estate.

If anyone disputes or objects to fees for the three categories of person who can recover directly from the estate, the person requesting compensation has 35 days to provide documentation establishing the reasonableness of the compensation and costs.

If a proceeding to remove a personal representative begins, that personal representative must pause paying their attorney fees and costs from the estate until the proceeding resolves.

What are “Reasonable” Costs and Fees?

Reasonableness is a standard decided by judges after considering a few factors. Some of these factors could be the value of the benefit to the estate, the number of parties involved in addressing the issue, the efforts made by the party requesting reimbursement to reduce and minimize the issues, and any actions taken by the person asking for reimbursement that unnecessarily expanded the issues or delayed the estate’s administration.

Whether attorney fees and costs are reasonable depends on the situation and always remains at the discretion of the court. However, the court usually doesn’t get involved unless there is an objection filed.

Conclusion

Whether your fees and costs for probate are recoverable from the probate estate completely depend on who you are in relation to the estate. Probate is an extremely complex and detail-driven area of law and if you have questions about whether your fees are recoverable from the estate, your best way to get an answer is to ask an attorney. Our probate and estate administration attorneys are well versed in these areas and happy to assist you in figuring out whether you can get your fees related to probating an estate reimbursed. 

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Maria
Zalessky

Associate Attorney (Russian Speaking) - Probate

Greenwood Village – Personal Injury

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