If you are involved in a probate case, one of your main questions might be who pays probate attorney fees? Typically, it is the estate that pays all costs associated with the probate process, but there may be some circumstances where others also have to help pay for those expenses.
What Are Probate Attorney Fees?
Probate attorney fees are the costs associated with legal services related to administration and settlement of a deceased person’s assets that were in their name alone. Such services may include filing paperwork with the court, preparing tax returns, notifying creditors of the estate, and negotiating with heirs or beneficiaries. The amount of fee charged will depend on the size and complexity of the estate, as well as time necessary to perform specific tasks associated with settling it.
Who Pays Probate Attorney Fees in Arizona?
Generally, the estate is responsible for paying the costs associated with probate cases. This includes any fees related to hiring an attorney, filing fees, and other expenses such as appraisals or accounting services. These costs get paid before any money is passed over to beneficiaries. If the estate is insolvent (meaning there are more debts than assets), then A.R.S. Section 14-3805 states:
Are Probate Attorney Fees Tax Deductible?
Probate attorney fees may be tax deductible, but it depends on the specific circumstances of your case.
If you personally paid probate attorney fees to administer an estate or trust, those fees may be deductible as a miscellaneous itemized deduction on your federal income tax return. However, this deduction is subject to the 2% of adjusted gross income (AGI) limitation, which means that you can only deduct the portion of your miscellaneous itemized deductions that exceed 2% of your AGI.
Additionally, starting in tax year 2018, the Tax Cuts and Jobs Act (TCJA) has suspended miscellaneous itemized deductions, including those for legal fees and tax preparation fees, through the tax years 2018 to 2025.
Therefore, whether or not you can deduct probate attorney fees depends on your specific tax situation, and you should consult with a tax professional for guidance on how to proceed.
Can the Estate Reimburse Family and Friends with Expenses Relating to a Probate Case?
Yes, typically family members or friends involved in a probate case can be reimbursed for any reasonable and necessary expenses. This includes court fees, appraisals, bookkeeping services, service of process fees, and more.
What Are Some Popular Methods to Reduce or Avoid Probate Costs?
There are several methods to reduce or avoid probate costs, and more of these methods become available as assets increase in value. Some popular options include adding a POD (Payable on Death) or TOD (Transfer on Death) designation to bank accounts, setting up a “living trust” for large financial assets, utilizing life insurance policies that name beneficiaries, making gifts during lifetime or after death, or even creating special types of joint property ownership with rights of survivorship.
Check out some of our other blog posts:
- When Does a Probate Lawyer Get Paid?
- Can Probate Be Reopened? Everything You Need to Know.
- What Is Probate Litigation? How a Probate Litigation Attorney Can Help
- Trust Litigation Attorney Who Will Fight For Your Rights
Have More Questions?
Are you currently facing the difficult process of probate and need legal guidance? Our law firm is here to help you navigate the complex probate process with professionalism and care. Our experienced attorneys have the knowledge and expertise to assist you with all aspects of probate, from estate planning to trust administration, and everything in between.
If you’re in need of legal representation for probate matters, we invite you to schedule a consultation with our team. Call us at 602-443-4888. Contact us today to get started and let us help you find peace of mind during this challenging time.