Lawyers are not cheap. Unless you hire someone from Legal Aid, you have to pay dearly for many types of attorneys. This is due to several factors: Greed, the horrible legal process we call the “Unified Court System” (a fancy-yet-inaccurate title), and the extreme difficulty New York places on small businesses being successful.
First: Greed!
Remember that most clients only participate in one or two Probates in their lives: Your second surviving parent and your spouse (if he / she predeceases you). You sell more cars than that in your life, and you probably did not know whether you got a great deal or not; Probate can be a MAJOR money moment, and due to the limited experience you have in it, you likely have no idea how much goes into it or how much it should cost.
Yes, many lawyers are practicing law because they can make a good living doing it. When there is an estate, the attorney generally knows where the money is, how much money is involved, and the general complexity that shall determine the amount of time they will need to work. And you know there is money that isn’t yours yet, and you are willing to spend money that isn’t yours so that you can make any of the remaining money yours (you can read that twice if you want).
The attorney also tends to get paid before you do, so he is almost guaranteed to get paid. And if the work is somewhat easy the attorney may charge a percentage of the gross estate (say 5%) to do all the work.
Bottom line: Be hesitant to accept a percentage payout on an estate: It will probably not be in your favor.
Next: Courts
I am a believer that big government is bad news for perpetuating family wealth. And while most people snicker when they see billionaire families get hammered on taxes or tax evasion, they tend to whine when their own family’s wealth gets eaten into by the taxman and court system.
Keep in mind that court fees themselves tend to be reasonable: A billionaire only pays $1,250 for a filing fee to the Surrogate’s Court in New York. However, it is the court’s procedures that end up costing the family, in the event of any of the following: Arbitrary requirements placed upon some estates, attorney mistakes that require multiple trips to the court, delays due to signing of relevant legal documents by interested parties, etc.
The Probate process is supposed to be the culmination of hundreds of years of Anglo-American jurisprudence…and in New York it remains somewhere in the middle of those hundreds of years. Add substantial government cutbacks to necessary staff numbers to this arcane process and you get attorneys, the highest paid people in the process, being the primary individuals dealing with the court’s (and their own) inefficiencies.
Lastly: New York Government Policies
It should come as no surprise that New York is one of the worst states to do business as a small business owner: Governing agencies are relentless and always right (even when they are clearly wrong), employees are expensive, etc. This does not include the monumental tax burden New York places upon anyone working here: I am shocked that City Hall and all the courthouses are not equipped with tax-funded rocket engines to blast them into orbit in the event that a minor natural disaster threatens the city.
Add on to all of this the cost of rent, food, sales tax on office supplies, and you get a very hefty legal bill. And lest you think all estate attorneys are driving Maserati’s and carrying Chanel handbags, we tend to be somewhere in the middle of the paid pecking order in Manhattan.
Want to save money on your estate attorney:
- Pay by the hour, not a percentage of estate assets
- Hire a firm that has their primary office space outside of Manhattan
- Ask whether an attorney or a paralegal will be doing the simple tasks, such as paperwork
- Do as much of the footwork as possible
- Have as much family information available as soon as possible (birthdays, addresses, emails, etc.)
Q FOR U: What is more important to you: Being fully informed, or making maximum money?
