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Ready, Set, Pay! Will I Be Reimbursed for Legal Expenses After Probate in California?

That all depends on what you mean by “probate.” In California, in fact in the entire United States, we operate under the so-called American system of litigation fees; meaning each party pays their own fees regardless of who wins the case.

But there are a few exceptions. For example, if you have a contract that says the prevailing party is paid attorneys’ fees and cost from the losing party, then the court can award fees in that circumstance.

Legal Expenses in Probate

For probate, there are different types of legal expenses. To probate an estate, meaning you open probate and either administer a Will or conduct a no-Will estate (referred to as an intestate estate), the standard attorneys’ fees and executor fees are paid from the estate assets. And all costs of the probate, such as for publication of notice, or appraisal of assets, are paid from the estate assets. If you were to pay for some of the probate costs out of your own pocket, then you can be reimbursed from the estate for those expenses; provided you ask the court for the reimbursement. Also, if you were to pay a debt of the estate out of your own pocket, then you can also ask for reimbursement from the estate assets for that as well (although you should never pay an estate debt from your own pocket because there is a creditor’s claim procedure for that).

Attorney and Executor Fees

The amount of attorneys’ fees and executor fees to be paid from the estate assets for standard probate administration services is set by statute. It is a calculation based on a sliding percentage of the estate’s total value. It begins at 4% for the first $100,000 of estate value. And then adds 3% of the next $100,000, 2% of the next $800,000 and 1% for values between $1 million and $5 million. For example, if you have a probate estate worth $1.2 million, then the probate statutory fee would be $4,000 for the first $100,000 of value, $3,000 for the next $100,000, $16,000 for the next $800,000, and $2,000 for the amount in excess of $1 million. That comes to a total fee of $25,000 ($4,000 + $3,000 + $16,000 + $2,000 = $25,000). Both the executor and the attorney for the executor would be entitled to $25,000 each for administration of this estate. These fees are paid from the estate assets, not from your own money. So you as the client should never pay these fees yourself. They are paid from the estate before distribution of the assets. And they require a court order before payment can be made to the attorney or executor.

If the executor or the attorney are required to provide extraordinary services to the estate, such as fighting a Will contest, selling real property, preparing an estate tax return, or conducting litigation against a creditor, then they are entitled to additional fees. These additional fees are known as extraordinary fees, and they are awarded at the court’s discretion. The executor and/or attorney must file a petition with the court detailing the work they did and the hourly rate they are requesting. The court will then award all, some, or none of the fees based on whether the fees benefitted the probate estate. Again, these fees are paid from the estate assets, and can only be paid after a court order is entered for payment.

Litigation Fees

Finally, there could be litigation fees in a probate estate. If you have to fight for, or against, a Will contest, then you may end up paying for fees out of your own pocket. But that all depends on whether you are fighting as an executor, or named executor, of the estate or as an interested person (i.e., an heir or beneficiary of the estate).

As an executor, you cannot charge or be paid fees until the court awards those fees through a court order. The same is true for the executor’s attorney. That means that the fight must take place, hopefully you win, and then you can ask the court for payment of the litigation fees as extraordinary compensation.

If, however, you are fighting or defending a Will contest as an interested party (not as the executor), then you would have to pay for the legal fees from your own pocket. If you win, then after the estate is opened you can ask for reimbursement from the estate assets. The court has the discretion to award you fees if it determines that your actions benefitted the estate. If you lose, then you would likely not receive any reimbursement of your legal fees and costs.

What about Trust contest cases?

Trust cases are a bit different because Trusts do not require court approval before paying litigation expenses in most cases. That means a Trustee who has control of the Trust assets has the ability to pay litigation expenses, unless a court orders otherwise (which can happen at times). The parties who are not Trustees, however, have to pay for litigation fees out of their own pockets. If you bring a Trust contest case and win, you are likely NOT going to be reimbursed for your efforts, unless the other beneficiaries agree to it, which rarely occurs.

You may be able to ask the court to award you reimbursement of legal expenses under the “common fund doctrine.” The idea behind the common fund doctrine is that your efforts helped protect the interests of others who did not participate in the litigation. If the court agrees, then your attorneys’ fees and costs would be reimbursed from the Trust fund.

For example, if you fought against a Trust contest and preserved the Trust estate for four other beneficiaries, but you are the only one who paid to do so, then the court has the discretion to award you a reimbursement of fees and cost from the Trust fund. This is a useful way to be reimbursed for your efforts when you helped protect other beneficiaries.

All told, the world of attorneys’ fees and costs can be a bit confusing in Trust and Will cases. Be sure to ask about the likelihood of being reimbursed before you start any court action.