Can an Oregon probate lawyer take fees from estate funds before a court approves them?

Plain-English summary

The opinion addresses a lawyer who represents the personal representative administering a probate estate, and answers three questions about when the lawyer may be paid.

On payment from estate funds (Question 1), the opinion concludes the answer is no: under Oregon RPC 1.5(a), a lawyer may not charge or collect an illegal fee, and "illegal" includes conduct forbidden by statute. Because ORS 116.183 requires court approval before legal fees are paid from estate funds, the opinion concludes a fee collected from estate assets without prior court approval is unlawful and therefore an illegal fee, citing In re Altstatt. On payment from the personal representative's own funds (Question 2), the opinion concludes "Yes, qualified": ORS 116.183 does not bar a lawyer from being paid by the personal representative personally, and the statute contemplates that the representative will typically advance attorney fees and later seek reimbursement from the estate. On the lawyer serving as personal representative (Question 3), the opinion concludes the same analysis applies, so the lawyer-representative still may not take compensation from estate assets before a court order.

The opinion notes that interim fees may be paid from estate funds once a court issues an order authorizing them, and cautions that more restrictive local court rules or standing orders on fee approval may apply, so lawyers should review them before accepting payment.

In practice

Under the Oregon rule as it stood at the time of the opinion, a probate lawyer is paid properly from estate funds only after the court approves the fee; collecting from the estate first is treated as an illegal fee. The opinion identifies payment from the personal representative's own funds, with later reimbursement from the estate, as the permitted route before court approval, and applies the same court-approval requirement when the lawyer is also serving as the personal representative.

The opinion expressly does not resolve more restrictive local court rules or standing orders, which may impose additional limits.

Common questions

Q: Can an Oregon probate lawyer pay themselves from estate funds before court approval?

A: No. The opinion concludes ORS 116.183 requires court approval before fees are paid from estate funds, so collecting from the estate first is an illegal fee under RPC 1.5(a).

Q: Can the personal representative pay the lawyer out of pocket before court approval?

A: Yes, qualified. The opinion concludes the lawyer does not collect an illegal fee by accepting payment from the personal representative's own funds, and the statute contemplates the representative advancing fees and seeking reimbursement.

Q: Does it change anything if the lawyer is also the personal representative?

A: No. The opinion concludes the same analysis applies, so a lawyer serving as personal representative still may not take compensation from estate assets before a court order authorizes it.

Background and rules framework

The opinion interprets Oregon RPC 1.5(a) (illegal or clearly excessive fees), which tracks Model Rule 1.5, as applied through the probate fee-approval statute ORS 116.183. It relies on In re Altstatt and In re Hockett.

Citations and references

Rules of Professional Conduct:

• Oregon RPC 1.5(a) / Model Rule 1.5 (illegal or clearly excessive fees)

Statutes:

• ORS 116.183 (court approval of attorney and personal-representative fees in probate)

Cases:

• In re Altstatt, 321 Or. 324, 897 P.2d 1164 (1995), fees collected without estate approval are illegal
• In re Hockett, 303 Or. 150, 734 P.2d 877 (1987), "illegal" fee includes statutorily forbidden conduct

See also

• ABA Formal Op. 505: Fees Paid in Advance
• ABA Formal Op. 475: Safeguarding Fees Subject to Division

Source

• Landing page: https://www.osbar.org/ethics/toc.html
• Original PDF: https://www.osbar.org/_docs/ethics/2021-197.pdf