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  1. #1
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    Default What Are Reasonable Fees For an Executor

    My sister and I were solely named heirs excluding bequests in the will of an estate in Illinois (IL) worth roughly a million dollars. The estate is being processed through probate. A lawyer was named as the Executor in the will. The estate was extremely well organized; assets were denominated in large dollar amounts to reduce the number of assets. The Executor has proceeded to charge between $250/hr and $325/hr. Until recently, as we approach the closing of the estate, the Executor has withheld the details of his billing practices. We were both surprised by the amount as it is significantly higher than the initial forecasts of both the deceased and the Executor (2X the former's figure). The collective activities of the Executor and his agents were charged at an average rate of $200/hr. (1) Is this a reasonable rate? (Tasks were not of a legal nature and often seemed to take much longer than reasonably necessary to complete.) (2) What is the reasonable number of hours required to close an estate? I have seen that Florida (FL) and Pennsylvania (PA) place limitations on reasonable fees of 3% of the estate value, but apparently IL allows the Executor to charge up to 10%. Suffice it to say that the lawyer seems to be taking trying to take full advantage of this law. Moreover, this particular lawyer serves on the Attorney Review and Disciplinary Committee (ARDC) in the area. (3) Does this matter? The Executor has acted as both the Executor and a lawyer. (4) Is that ethical given the conflict of interest? (5) Isn't it a conflict-of-interest that the Executor can set his own hourly rate at the expense of the estate? (6) Is there some sort of fiduciary requirement of an Estate Executor?

    The whole situation is very frustrating. Thank you in advance for any useful information you can provide.

  2. #2
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    Default Re: What Are Reasonable Fees For an Executor

    It may well be a reasonable rate for that lawyer and for your community. If you don't believe the rate is reasonable, or that the hours billed are reasonable, you're free to challenge the bill with the probate court - but be aware that you could end up paying the lawyer's fees for his response to your challenge.

    If you believed there was a conflict of interest, that would have been something to raise at the outset, not only after you got upset about the bill. Billing the estate for hours worked isn't a violation of the fiduciary duties of an executor.

  3. #3
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    Default Re: What Are Reasonable Fees For an Executor

    Mr. Knowitall:

    What do probate courts typically use as a metric of reasonableness? Are there metrics? Is an Executor overcharging at lawyer hourly rates rather than administrative rates for non-legal work? Is a lawyer acting as both an Executor and a Lawyer for an estate a conflict-of-interest? It seems somewhere there should be some balance between performance (efficacy, skill, and quality of work) and pay.

    My intention is not to say, "billing the estate for hours worked is a violation of the fiduciary duty." My intent was to say I believe the executor should expect "performance" of those duties preformed particularly those billed at rates between $100/hr and $300/hr. By "performance," I mean completion of a task without errors. Instead he seems to be allowing his agents (with whom he works) to pay themselves for correcting deficiencies.

  4. #4
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    Default Re: What Are Reasonable Fees For an Executor

    Such factors as the prevailing rates in the community, the size and complexity of the estate, whether the testator knew what his lawyer cost when choosing him as lawyer and executor.... Lots of things can come into play.

  5. #5
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    Default Re: What Are Reasonable Fees For an Executor

    Mr. Knowitall:

    1) The estate was roughly a million dollars in size.
    2) The prevailing legal rates in the area are between $200/hr and $300/hr.
    3) The estate was simple; few assets large denominations.
    4) I think the lawyer was borderline incompetent based upon the length of time he took to complete tasks (this is difficult to prove, but how do you prove it?).
    5) The testator believed the estate would settle for an amount more than 3 times less than the current charges (I can only assume that is what the same lawyer told the testator when he placed him in the position as Executor), he communicated the amount to me, but I am not sure that is sufficient. Moreover the Executor estimated the closure of the estate at roughly twice what the testator indicated to me.
    6) Is there a "silver bullet?"

    This whole situation is consistent with damage by a "thousand and one cuts," which makes it difficult to pin down. Thank you for your input.

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