Probate Q&A Series

How an Hourly Retainer Fee Works in a North Carolina Probate Case

1. Detailed Answer

When you hire an attorney to handle a probate administration in North Carolina, you typically enter into a written fee agreement. In most cases, the lawyer will require an hourly retainer fee, sometimes called a deposit or advance, before beginning work on your estate. Here’s how it generally works:

Setting Up the Retainer

The attorney and personal representative agree on an hourly rate, for example, $250 per hour. You then pay a lump‐sum retainer—often ranging from a few thousand dollars to a higher amount, depending on the estate’s complexity. This retainer goes into a dedicated trust or client funds account.

Billing Against the Retainer

As the lawyer performs services such as filing the petition, notifying heirs, inventorying assets, and communicating with creditors, the attorney tracks the time spent. At regular intervals—typically monthly—the attorney sends a billing statement showing hours worked, tasks performed, and expenses incurred. The amount due on that bill is subtracted from the retainer balance.

Replenishing the Retainer

Once the retainer balance drops below a certain threshold (often 20–25% of the original retainer), the attorney will ask you to replenish it. If you do so, the case continues uninterrupted. If you decline, the attorney may file a motion to withdraw under North Carolina Rule of Professional Conduct 1.16.

Statutory Basis for Fees

North Carolina law requires that attorney fees in probate be reasonable and treated as an administrative expense of the estate. Under N.C. Gen. Stat. § 28A-15-1, administrative expenses such as attorney fees have priority over most distributions to heirs. The personal representative must ensure fees are documented and justified.

What Happens if Estate Assets Are Insufficient?

Occasionally, you may discover that the estate’s assets cannot cover ongoing legal fees or other administrative costs. In that situation:

  • Review Available Cash: The personal representative inventories all liquid assets—bank accounts, certificates of deposit, etc. If funds exist, you use those to pay for legal services.
  • Sell Estate Property: If cash is scarce, the personal representative can petition the court to sell nonexempt property—real estate, vehicles, or valuable personal items—to generate funds. See N.C. Gen. Stat. § 28A-22-1.
  • Apply for Limited Estate Administration: If the total estate value falls below a statutory threshold, you may qualify for a simplified proceeding. For small estates under $20,000 (excluding homestead allowances), see N.C. Gen. Stat. § 28A-20. This route often reduces legal costs.
  • Petition the Court for Fee Approval: If there’s a dispute over fees or insufficient funds, the attorney or personal representative can file a fee petition in the clerk’s office. The clerk reviews rates, hours, and necessity before approving payment.
  • Attorney Withdrawal: If the estate cannot support further fees and no other resolution exists, the attorney may seek permission to withdraw. The personal representative then decides whether to proceed pro se, hire a different attorney, or close the estate via small‐estate procedures if eligible.

2. Key Takeaways

  • An hourly retainer is a deposit against which your attorney bills actual time and expenses.
  • North Carolina statutes treat attorney fees as a priority administrative expense (§ 28A-15-1).
  • When the retainer runs low, you must replenish it or your attorney may withdraw.
  • If the estate lacks funds, you can sell assets, qualify for a small‐estate procedure, or petition the court for fee approval.
  • Proper planning and early listing of costs help avoid surprises in probate administration.

Need Help with Probate Costs?

Understanding retainer fees and navigating funding shortfalls can challenge personal representatives. At Pierce Law Group, our attorneys guide you step by step, ensuring compliance with North Carolina law. Contact us today to discuss your probate case. Email intake@piercelaw.com or call us at (919) 341-7055. Let us help you settle your loved one’s estate with confidence.