[Date]
[Name and address of personal representative]
Re: Estate of [decedent], deceased
Dear [name of personal representative]:
Thank you for selecting me to represent you as personal representative of the above mentioned estate. I look forward to working with you.
When legal services are needed, most people have questions about the cost of those services. In anticipation of those questions, and to explain my billing procedures, I have developed this engagement letter. It provides the information that you are entitled to, helps you know what to expect, and clarifies the responsibilities of both you and me. This letter also satisfies a court rule adopted by the Michigan Supreme Court, which requires me to have a written fee agreement when I represent a personal representative.
Unless otherwise clearly indicated by the context, the first person pronouns (I, me, etc.) used in this letter refer to [name of law firm] and to any person employed by the firm. The terms “client” and “you” refer to you as personal representative of the estate.
Duties and Responsibilities
I agree to represent you as personal representative of the estate and to provide you with legal services in connection with the administration of the estate. I will provide you with copies of all papers filed with the court and other government agencies, such as taxing authorities, and all correspondence.
You agree to cooperate fully with me and to provide, in a timely fashion, all information known to you or available to you in connection with the administration of the estate. You will use your best efforts to obtain and to provide me complete and accurate family and financial information in connection with the administration of the estate. You will keep me reasonably informed of your progress in obtaining the necessary information.
I commit myself to communicate clearly with you and to avoid the unnecessary use of confusing legal terminology. I intend to be accessible to you and will welcome your questions.
I will furnish copies of this letter to parties such as taxing authorities and the court if they so request. I will send a copy of this letter to the beneficiaries of the estate who are affected by the payment of my fees when I send them notice of the probate proceedings. I may also provide copies of monthly billing statements to any beneficiary on request.
Summary of Services to Be Performed
I will provide those services that are necessary and appropriate to administer the estate under the laws of Michigan, beginning with the petition/application to open an estate and have you qualified as personal representative. The following list includes the types of services that I may provide:
1. Prepare and complete all notices of appointment of you as personal representative and other notices concerning creditors as are required by the laws of the state of Michigan and rules of court having jurisdiction of the estate.
2. Assist you in preparing a complete inventory of all assets of any kind or nature, which are subject to probate and any nonprobate assets such as life insurance, retirement plans, and other assets.
3. Advise you how to proceed and, at your request, help you make a thorough search for all debts, obligations, and contingent liabilities of the estate to determine the financial condition of the estate.
4. Advise you regarding other actions that must be taken by you to secure, reinvest, or protect the assets and provide for the discharge of the liabilities, including death taxes of the estate.
5. Prepare and complete all interim reports to the probate court and the beneficiaries as required during the course of administration of the estate.
6. Advise you regarding tax returns that are required for the estate and for the decedent; however, you are responsible for retaining a certified professional accountant to prepare these returns.
7. Review and consider with you any postdeath planning, such as alternative asset valuation options, use of disclaimers, funding of trusts as provided for in the estate plan, timing of the distribution of assets that are beneficial to the estate and any beneficiaries, and election of income tax benefits to the estate and beneficiaries.
8. Plan for the payment of all death taxes and the source of funds to be used in payment of any tax obligations, along with any elections for installment payment of taxes if available.
9. Prepare a plan of distribution of assets held in the estate, either outright or to separate continuing trusts, for the beneficiaries.
10. Prepare all reports, notices, consents, receipts, and accountings for closing the estate and your discharge as personal representative.
11. Counsel and advise you on any related questions or matters arising out of the administration of the estate.
Although at this time we do not anticipate any contests involving the estate, if a contest arises and any matters involving the estate are appealed to a higher court (i.e., court of appeals or supreme court) [I will handle the appeal at my normal hourly rate / I will refer your matter to an appellate specialist, with whom you will enter a separate fee agreement].
If there are any other legal services that you wish me to perform for you as personal representative, we should first consult together and supplement this letter agreement before I begin those tasks.
Fees
Except as otherwise agreed, I will bill you for my services on an hourly basis for time spent on your matter, including travel time. The following rates currently apply but may be increased by me without prior written notice to you (but only once each year and by no more than $10 per hour):
Senior attorneys / $[amount] – $[amount] per hourAssociate attorneys / $[amount] – $[amount] per hour
Legal assistants, law clerks / $[amount] – $[amount] per hour
The time recorded by the above persons will be billed in increments of one-tenths of an hour (6 minutes). For example, if 18 minutes are spent making a telephone call and preparing a brief letter, the charge will be for three-tenths of an hour.
I will be the primary attorney responsible for your matter, and my current hourly billing rate is $[amount].
In addition to paying fees, you are responsible to pay for cost items such as court or agency filing fees, travel expenses, recording and certification fees, transcripts, investigations, witness fees, courier services, and similar items. On the statements, these items appear separately from the hourly charges and are referred to as “costs.” The rates currently charged for costs and fees may be subject to adjustments without prior notice to you.
Each month, I will provide you with an itemized statement for services and costs to be paid in full within 15 days after you receive the statement. The amount billed is the cash price. If you pay later than 15 days after you receive the statement, you may be charged a time-price differential calculated at the rate of 1.5 percent per month of the balance from the due date until paid.
You agree that the fee is based not merely on the purchase of a fixed amount of time but includes the value of services rendered and takes into account MRPC 1.5, including
1. The time and labor required, the novelty and difficulty of the questions involved, and the expertise and skills required to perform the legal service properly.
2. The likelihood, if apparent to the client, that acceptance of the particular employment will preclude other employment by the lawyer.
3. The fee customarily charged in the locality for similar legal services.
4. The amount involved and the results obtained.
5. The time limitations imposed by the client or by the circumstances.
6. The nature and length of the professional relationship with the client.
7. The experience, reputation, and ability of the lawyer performing the service.
Attorney fees payable by the estate are subject to review by the probate court. If a final order is entered directing me to return any fees or costs to the estate, I will make payment promptly. Nevertheless, my fees will be payable whether or not approved by the estate tax authorities or probate court. Although it is usual and customary to look to estate assets as the source of funds with which to pay our charges, the responsibility for payment ultimately is yours. If you experience a problem regarding on-time payment, please contact me to arrange a mutually satisfactory alternative arrangement.
Conflicts of Interest and Confidentiality
Any relationship between a lawyer and client is subject to the Michigan Rules of Professional Conduct. In estates, ethical rules applicable to conflicts of interest and confidentiality are of primary concern because of the close relationship of the parties. I cannot overemphasize the need for complete and full disclosure to me at all times of all your acts and doings to avoid problems that may arise in these areas.
As a condition of this representation, you agree that, notwithstanding normal rules of confidentiality, you authorize me to notify the probate court, creditors, or beneficiaries of the estate, as the case may be, of any actions or omissions on your part that have a material effect on their interests in the estate, including acts or omissions that may constitute negligence, bad faith, or breach of fiduciary duties.
Limits of My Professional Relationship
Termination of my services and this agreement is subject to court approval. Subject to that approval, the following apply:
1. You may terminate this agreement at any time by giving me written notice.
2. I may terminate this agreement at any time provided that I give you at least 15 days’ written notice, except that I reserve the right to immediately terminate any legal services if you fail to pay my fees and costs in a timely manner.
In either case I retain the right to collect all fees and costs still owing at the time of termination.
After the probate administration is completed, my engagement for that purpose will be concluded and our attorney-client relationship on that matter will terminate. However, any duty of confidentiality that I owe you under the “attorney-client privilege” will continue. There is no implied representation that I can or will provide any further service beyond the engagement period and scope of service without first negotiating a new contract in writing. However, this agreement will control all future work except to the extent that I have otherwise agreed in writing.
Who Is the Client
You should understand that I represent you as personal representative of the estate. I do not represent the beneficiaries of the estate even though I will, from time to time, provide them with information about the administration of the estate. In appropriate circumstances, I may advise beneficiaries to obtain independent counsel as I do not represent them.
If you are a beneficiary of the estate, I must advise you that I only represent you in your capacity as personal representative and can only represent you as a beneficiary if there is no conflict of interest by reason of such relationship.
For example, a conflict could arise in distribution of assets to you if one of the other beneficiaries should object to your individual ownership of partial interest in an estate asset or by reason of the amount of compensation, which you may claim. In the event of such a conflict, you may have to consider employing independent counsel to represent your personal interests.
Ownership of the File
At your request, your papers and property will be returned to you promptly on receipt of payment for outstanding fees and costs. I will see to it that you have copies of all relevant correspondence and final legal documents that are connected with my representation of you. I will nevertheless supply you with additional copies of correspondence and other documents previously given to you in the course of my representation, provided you reimburse me for the copying charges. It is agreed, however, that my own files, including notes, drafts, research materials, internal memoranda, and other lawyer work product, whether or not created during the course of my representation of you, will belong to me and will not be subject to copying or delivery to you.
Retention of Documents
You agree that I may destroy my file, in such a manner as to preserve your confidentially, without any further notice to you, after five years from the termination of my services or five years after the issuance of a certificate of completion or order discharging you as personal representative, whichever occurs first.
Entire Agreement
This fee agreement contains the entire agreement between us regarding your retention of my firm as legal counsel and it supersedes all prior negotiations, agreements, and understandings. This fee agreement may only be amended by a written document duly executed by both parties.
Acceptance
If these terms are acceptable to you, please date and sign the extra copy of this letter and return it to me. If you have any questions concerning this letter or any statement that you receive from me, please contact me promptly so that the matter can be resolved to our mutual satisfaction.
Sincerely,[Name of law firm]
By /s/______
[Name of lawyer]
The terms of this letter are acceptable.
Dated: ______/ /s/______[Name of personal representative]