Bill would let probate administrators pay certain attorney fees ahead of mortgage claims in low‑asset estates

Representative Stewart presented sponsor testimony for House Bill 55, which would clarify how probate attorney fees and administration costs are paid from estates that must sell real property. Stewart said the bill aims to ensure low‑asset estates can be fully administered when mortgage claim proceeds otherwise exhaust estate funds.

Stewart told the committee the current statutory scheme allows the costs of a land‑sale proceeding to be paid ahead of a mortgage holder, but not always the broader costs of general probate administration. “All this bill would do is simply say you get to we pay the cost of the land sale proceeding off the top. We also pay the cost of the general probate administration off the top, and the mortgage holder then gets the rest,” Stewart said. He said the change is intended to address cases in which attorneys take on low‑income estates and cannot complete administration if the mortgage holder takes remaining funds.

Stewart said sponsors would offer an amendment to cap recoverable general administration costs at $5,000, and that interested banking and lending groups do not expect to oppose the cap. Representative Sennenberg asked whether the bill contemplates an hourly fee cap or whether county fee schedules would apply; Stewart responded that most counties use local fee schedules and that low‑value estates already produce relatively small fees.

Committee members asked how often the problem occurs; Stewart said instances are anecdotal among practitioners who handle low‑asset estates and that the change is intended to remove a deterrent to completing administration. No formal committee action occurred during the hearing.