No 'Double-Billing' for Trustee, Executor or Administrator Services!
You should know that if you hire some other firm to assist you with Executor and/or Trustee duties, you are likely to be Double-billed.
To explain, when someone is named Executor and/or Trustee in an Estate Plan, there are a number of duties which must be performed (e.g. inventorying assets, paying debts, liquidating assets, filing estate and/or income tax returns, securing real estate appraisals, ensuring the named assets are properly managed and invested, final distribution of assets, etc.). These duties can be performed by anyone – i.e. you don’t need an attorney license to accomplish these tasks.
However, MN statutes provide that whoever performs these duties (i.e. Administrator, Executor and/or Trustee) is entitled to “Commissions” paid from the estate – basically, a salary for those services (because after all, being Executor and/or Trustee is a job – it can be very complicated and hard work).
Commissions on a typical estate generally are about 4-5% of the gross value of the assets managed (remember, this is gross value – any mortgages, loans, liens, etc. are irrelevant when calculating this value).
BUT, if you hire the typical attorney to do those same services, that attorney can also charge attorneys fees – basically, you are paying for the expertise of an attorney and paying for the convenience of having the attorney do the work for you.
Attorney’s fees can be an additional 4-5% of the estate’s gross value. This is often referred to as "double-billing" for the same work – that’s up to about 10% of the estate's gross value (and the attorney can charge more if can show the estate is any more complicated than would be considered average – such as someone challenging any aspect of management of the estate).
So, as an example, in an estate with a gross value of $100,000, the typical Executor and/or Trustee can customarily claim to be paid about $5,000 in Commissions. BUT, if you have an attorney do the same work, the estate can be charged $10,000 – or more, plus expenses.
So what if your estate is worth more than $100,000? Maybe you own a home, a nice vehicle, some recreational vehicles/equipment, a business, or even a hunting shack. That 10% can add up to a lot of money quickly. And the attorney (or whoever the Executor or Trustee is) gets paid before everyone else.
There are also additional billing issues to think about:
There is typically an attorney fee rate for work done in the office, and another – higher – attorney fee rate for court appearances (there are some functions of probating an estate that must take place in front of a Judge; therefore, larger fees will be assessed).
And when it comes to office work by the law firm, I'll let you in on an attorney billing secret: it does not matter who in the attorney’s office did the work – whether it be the actual attorney or just a legal assistant – because the work was done under the supervision of an attorney, it ALL gets billed at the attorney’s billable rate ($225.00/hour and up is a typical Iron Range attorney rate).
The Maki Law Firm’s Single-billing fee system for Estate Administration Services
Well then, how does the Maki Law Firm calculate billing?
The main advantage of using the Maki Law Firm to assist with your Executor and/or Trustee duties is 'single-billing' - the work is billed for what it is.
If I am performing Executor-type work then you will only be billed as any regular Executor would (NO additional attorney fees are added). You will only be billed attorney fees for actual attorney-necessary work (preparing court filings, court appearances, etc).
The Maki Law Firm's standard 'single-billing' system can mean significant savings to your estate – which means that money stays in your estate and is applied to your wishes as laid out in your Minnesota Estate Plan.
One final example:
If your estate is worth $100,000
THEN: you will only be charged approximately 5% of the estate value, as opposed to 10% by most other attorneys.
A 5% savings on attorneys fees (about $5,000 in this example) would pay for your entire Estate Plan – meaning not only is your Estate Plan likely to be free, but any extra will go right back into your estate!
Is your gross estate worth more? Great, then even more saving!
So, before you decide to hire another attorney to handle your estate Executor and/or Trustee duties, contact the Maki Law Firm to ensure you are getting the best deal!
Into whose pocket do you want your estate’s money to go? An overpriced attorney, or your beneficiaries?
You’ve worked hard your entire life to get what your have - don’t blow it at the end!
Still have questions? Ready to get started on your Minnesota Estate Plan?