If you accept your nomination to act as Executor or Administrator of a deceased person’s probate Estate, then we will normally recommend charging attorney’s fees using our Unit Billing System, which is described below.
Historically, there have been two primary methods used in charging attorney’s fees for probate matters after a decedent’s death (“Probate Matters”): (1) charging a Specific Dollar Fee that is based upon a percentage of the value of the assets of the Estate; and (2) charging a fee on an Hourly Basis, with or without an estimate of the total hours that will be involved.
In our experience, it has often proved difficult to quote, in advance, a specific dollar fee, as the time it takes to complete all Probate Matters can last up to 2 years, making it almost impossible to determine the specific amount of time that will be spent during such an extended period. On the other hand, quoting a specific dollar fee that is based upon a percentage of the value of the assets of the Estate may not have any bearing whatsoever upon the amount and value of the professional services that will be rendered, and can oftentimes result in much higher attorney’s fees than should otherwise be charged.
The alternative method of quoting a fee on an hourly basis for all Probate Matters has also proven to be unsatisfactory, as, again, it is difficult to anticipate all of the time that will need to be spent over an extended period. As a result, any estimate of the total hours to be involved will, by necessity, be open-ended, and will also be somewhat meaningless for planning purposes. In addition, charging fees on an hourly basis has not proven to be a system that (a) encourages a law firm to be efficient in managing its time and resources, and in completing all Probate Matters in a timely manner, or (b) encourages the Executor or Administrator to contact the attorney when they have a legitimate question, for fear of being “nickled-and-dimed.”
Based upon our experience in this area since 1978, we have learned that it is important that a specific dollar fee for all Probate Matters be quoted, in advance, with as much certainty as possible. In that way, both the beneficiaries of the Estate, as well as the law firm, can plan accordingly.
For that reason we have adopted our “Unit Billing System.”
We have created a spreadsheet that lists all of the potential projects that might need to be included in the Probate Matters for any hypothetical probate Estate. Each project is then assigned a number of Units, and all Units are assigned a uniform fixed dollar value. No Executor of any probate Estate would ever need to complete all of the potential projects that are listed.
For example, preparing and filing an Illinois Estate Tax return is one of the potential projects, and there are a specific number of Units assigned to that project. However, if no Illinois Estate Tax Return needs to be prepared and filed, that project does not apply.
Once we know the specific projects that will need to be completed, we simply add up the number of units assigned to each of those specific projects, and multiply the total number of Units by the uniform per Unit dollar value. The result represents the attorney’s fees that will be charged for that particular probate Estate.
To be fair, our Unit Billing System does not provide 100% certainty for planning purposes, as there are some issues, such as Will contests, litigation, and audits of income, gift or estate tax returns, which can arise after a person dies. However, in the great majority of probate Estates, the Unit Billing System has proven to be an excellent method in establishing reasonable, specific dollar attorney’s fees for all Probate Matters.
Our Unit Billing System is not dependent upon the value of the assets in the Estate (and regardless of whether “Estate” is defined to include non-probate assets), is not dependent upon the total hours of time spent by our firm, and includes all charges for photocopying, postage, messenger or courier fees, and follow-up calls, correspondence and Emails with our clients and the advisors they authorize us to contact. The only additions to the fees charged using our Unit Billing System are for any client-approved amounts we advance to third parties such as appraisers, security evaluators, accountants, courts or other governmental entities.
For the above reasons, our Unit Billing System has become extremely popular since we adopted it in 2001.
© 2021 Joseph C. Johnson, P.C.