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Bill would end guidelines on estate administration attorney fees

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Sen. Aaron Bean

Sen. Aaron Bean

The presumed reasonable fees for estate administration attorneys set out in state law would be replaced by a provision telling consumers they can negotiate and get prices from more than one lawyer, under a bill that has passed the Senate Judiciary Committee.

SB 954, sponsored by Sen. Aaron Bean, R-Jacksonville, cleared the committee 8-3 on March 15 after debate, including opposition from the Bar’s Real Property, Probate and Trust Law Section. It would amend F.S. §733.6171, which sets a presumed fair fee based on a percentage of the estate’s value.

The bill originally changed a “presumed to be reasonable” fee schedule and instead said the attorney fee for estate administration “may be” based on the schedule. But Bean amended the bill in committee to remove any reference to a fee schedule.

“Is it appropriate to put prices at all in statute? I say no,” Bean said. “Where there is no prescribed fee, there is a public negotiation and the consumer benefits as they are able to negotiate such a fee….

“To those attorneys who do this type of work, they’re going to have a conversation with their prospective client that says, ‘You don’t have to pick me and the fee is not prescribed in law.’”

“You’re trying to create a market approach to fees that are not tied to a percentage or value of an estate?” asked Sen. Darryl Rouson, R-St. Petersburg.

“That was our initial mission, to take that out,” Bean replied. “I’ve now come to the realization we don’t need to put fees in at all. Let the consumer negotiate the fees.”

The bill “sort of creates this sort of no-man’s land for what a fee structure might look like,” said attorney Sarah Butters, representing RPPTL. “There’s no guidance, not only for practitioners on what we should be charging in estate administration, there are no guidelines for a consumer and there’s no guidelines for the court in determining what a reasonable fee is.”

She said there is already negotiation with the personal representative who hires the lawyer, and the statute helping to provide a framework. In addition, the fee can be challenged by beneficiaries and creditors of an estate.

“It provides some guidance to the consumer about what a reasonable fee might look like in a particular administration,” Butters said. “Every situation is unique and we encourage that dialogue to happen between the lawyer and the client when the fee structure is being negotiated….

“We prefer to have some structure, some guidance, not just for the client but for the court, for other beneficiaries, for the public generally who are looking at these fee structures in trying to figure out what’s reasonable and what’s not.”

She also said attorneys are bound by Bar rules not to charge an excessive fee and said the section supports the provision encouraging clients to negotiate and compare prices.

“Every one of these cases is different and 3% may not be enough for a smaller estate that may be complex and 3% may amount to a windfall for the attorney if it is a large estate that is not terribly complex,” said Sen. Jennifer Bradley, R-Orange Park. “To leave it to the parties to have a reasonable fee seems fair. The attorneys are going to be bound by their ethical obligation to have it be a reasonable fee. I don’t see any reason to have an artificial limit on the fee.”

Sen. Daryl Rouson

Sen. Darryl Rouson

“I guess what I worry about is doing away completely with suggested guidelines that educate both the consumer and to an extent constrain the lawyer,” Rouson said. “I worry about an uneducated client not having guidelines to look at, to balance and base reasonableness on.”

Bean argued that statutes don’t suggest charges for auto mechanics or plumbers and shouldn’t for lawyers, calling the current guidelines “a suggested retail price.”

“Let’s take it out and let’s have that attorney have the conversation with the consumer to say, ‘This is my fee, it’s negotiable, and you don’t have to choose me. You can pick anybody you want,’” he said. “That’s true consumer empowerment.”

The bill next goes to the Commerce and Tourism Committee and Rules Committee. Its House counterpart, HB 625, by Rep. Clay Yarborough, R-Jacksonville, has passed the Civil Justice and Property Rights Subcommittee and is now in the Judiciary Committee. If it passes there, it will go to the House floor.