The California Probate Code contains a schedule of fees paid to the attorney and executor of an estate. These are called “probate fees.” Additionally, the Probate Code allows the court to award extraordinary probate fees on top of the standard statutory fee. So, what are extraordinary probate fees?
Extraordinary probate fees are additional fees awarded by the probate court for work that is not ordinarily part of estate administration. The probate court can award extraordinary probate fees to the attorney, the executor, or a paralegal.
If you are an attorney or personal representative (executor or administrator) of an estate, then this post will outline the work for which you may seek additional compensation.
What Work Is Ordinary for Estate Administration?
California maintains statutory probate fees to compensate attorneys and personal representatives of an estate.[i] This statutory fee is supposed to cover all of the everyday work done to administer an estate. Here is a nonexhaustive list of the type of work that is typical in any estate administration:
- Meeting with the client/attorney.
- Preparing the Petition for Letters of Administration.
- Preparing the Petition for Probate.
- Ordering publication of the notice of Petition to Administer Estate.
- Preparing and serving the Notice of Petition.
- Preparing required supplements or declarations.
- Drafting the Inventory & Appraisal.
- Filing and drafting a Petition for Family Allowance.
- Handling debts and creditor’s claims.
- Drafting status reports for the court.
- Preparing interim accounting.
- Preparing a Petition for Preliminary Distribution.
- Drafting a Petition for Compensation.
- Drafting the Final Accounting and Report.
- Supervising distribution of the estate and preparation of receipts.
The court expects that you will do all of this work in any estate administration. Therefore, the probate court does not allow extraordinary fees for this type of service. Instead, the court only awards extraordinary fees for work that is truly outside the work typically expected for estate administration.
What Kind of Work is Extraordinary?
If the attorney or personal representative of the estate goes above and beyond the call of duty, the court can award extraordinary fees.[ii]
The Probate Code does not define what “extraordinary” means. But the California Rules of Court provide guidance.
1. Extraordinary Work Done by the Personal Representative (Executor).
The court can award extraordinary probate fees to the personal representative of the estate for the following work:
- Selling, leasing, exchanging, financing, or foreclosing real or personal property;
- Carrying on decedent’s business if necessary to preserve the estate or under a court order;
- Preparing tax returns; and
- Handling audits or litigation connected with tax liabilities of the decedent or of the estate.[iii]
This is a nonexclusive list provided by the California Rules of Court. The probate court can award extraordinary fees if the personal representative does the above work. But it can also award extraordinary fees for work that is similar in scope and nature to the work listed above.
2. Extraordinary Work Done by the Attorney.
The court can award extraordinary probate fees to the attorney for the following work:
- Legal services in connection with the sale of property held in the estate;
- Services to secure a loan to pay estate debts;
- Litigation was undertaken to benefit the estate or to protect its interests;
- Defense of the personal representative’s account;
- Defense of a will contested after its admission to probate;
- Successful defense of a will contested before its admission to probate;
- Successful defense of a personal representative in a removal proceeding;
- Extraordinary efforts to locate estate assets;
- Litigation in support of attorney’s request for extraordinary compensation, where prior compensation awards are not adequate compensation under all the circumstances;
- Coordination of ancillary administration; and
- Accounting for a deceased, incapacitated, or absconded personal representative under Probate Code section 10953.[iv]
3. Extraordinary Fees Done by a Paralegal.
Certified paralegals may also claim extraordinary fees. But, there are special requirements for paralegals.[v] A paralegal can claim extraordinary fees only if the paralegal worked for and attorney or an attorney supervised the paralegal. Additionally, the paralegal must provide the following to the court:
- The claim must describe the qualifications of the paralegal. For example, it needs to identify the education, certification, continuing education, and experience of the paralegal.
- The claim must state the hours spent by the paralegal and the rate requested.
- The paralegal must describe the services performed by him/her.
- The claim must say why the paralegal’s services were necessary.
- The claim for extraordinary fees for a paralegal’s and attorney’s work cannot exceed the amount appropriate if the attorney had performed the work without the paralegal. In other words, it must be cost-effective to use the paralegal.
Circumstances Where Extraordinary Work Goes Uncompensated.
The mere fact that an attorney or paralegal does extraordinary work, does not obligate the probate court to award extraordinary fees. Instead, the Probate Code merely gives the court discretion to award extra fees for extra work.
In some cases, courts decline to award extraordinary probate fees, even for work that goes WAAAAAAAY above the ordinary.
For example, we are all familiar with Hilton Hotels. But you may not know about the 12-year legal battle over Conrad Hilton’s Estate.
Conrad Hilton died in 1979. He left an estate work almost a billion dollars. Mr. Hilton died with a will (why that is a huge mistake is covered in our articles: What is Probate and Why Avoid It? and What is a Trust?). The executor of the will hired an attorney to represent them during the estate administration.
For 12-years, the attorney provided extraordinary services to the estate through litigation and specialized accounting.
In 1992, the attorney filed a petition for extraordinary fees.
The court denied the petition because the existing statutory fee for ordinary service sufficiently compensated the attorney for his service.
You can read the decision in Estate of Hilton (1996) 44 Cal.App.4th 890.
The attorney, in that case, received $1,500,000 in ordinary fees for his work. He sought extraordinary fees totaling $2,225,000. The court denied the request for extraordinary fees because it believed that $1,500,000 sufficiently compensated the attorney for his 12-years of work.
Thus, when applying for an extraordinary fee, you need to demonstrate not only that you performed extraordinary work, but also that the ordinary fee insufficiently compensates you for the extraordinary work.
Extra work deserves extra pay, but only when the normal pay does not adequately compensate you for your extra work. As an estate planning attorney who does probate, my opinion is that the ordinary fee generally adequately compensates me for my ordinary work, and even some of my extraordinary work.
Therefore, I would be cautious when applying for an extra fee.