A New York Probate Lawyer said the decedent died on May 1, 2004, leaving a will which was admitted to probate on July 7, 2004. The decedent was survived by his four children. The will makes pre-residuary cash bequests of $45,000.00 to each of ghem. The will further provides that the decedent’s residuary estate be divided equally among his four children. Letters testamentary issued to his son.
A New York Estate Lawyer said that the son originally filed a First and Final Accounting of his proceedings covering the period May 1, 2004 through January 31, 2008. Thereafter, he filed a document entitled “First Interim Account of the Estate.” This document covers the period from May 1, 2004 to January 31, 2008, the same period covered by the First and Final Accounting.
Another son opposed the probate. The parties stipulated at trial that the estate had the burden of proof on the issue of whether the decedent make a loan to him. In addition, the parties acknowledged that the petitioner took an advance payment of commissions in the amount of $10,0000.00, without prior court order and repaid the sum of $10,000.00 to the estate.
After the trial, each party submitted a post-trial memorandum of law. The petitioner argues that the testimony at trial confirmed that oppositor admitted to his siblings at the meeting that he at one time owed his father the sum reflected on Exhibit 3. He did not dispute that he had owed the amount shown, but rather claimed that the money had been repaid, with the exception of $3,400.00. Thus, by claiming to have repaid these funds.
A Westchester County Probate Lawyer said that the petitioner further argues that Oppositor should be equitably estopped from asserting a statute of limitations defense because: (1) he knowingly and intentionally made a misrepresentation as to his possession of the receipts; (2) he made this misrepresentation with the intention that his siblings would refrain from bringing suit to recover the debt; and (3) he knew that he had never repaid the debts and did not have receipts. In any event, Petitioner claims that the partial payment of $3,400.00 revived the running of the statute of limitations.
Suffolk County Probate Lawyers said that the oppositor argues that Petitioner has failed to carry his burden of proof on the issue of the debt by establishing by a preponderance of the credible evidence that Oppositor owed any monies to the estate. Oppositor argues that the original account, verified by Petitioner, did not include the loan. Oppositor argues that the “entire sum and substance of support for the alleged ‘loan’ due from… [him] was a single page of hand-scrawled figures and notations, suffused with ‘whiteout’ material covering portions of it.”
Oppositor also argues that the “Analysis of Distributions” prepared by the estate accountant and admitted into evidence as Exhibit 7 supports his position because it did not reflect any loans owed by Oppositor to the estate. He contends that the only monies he agreed to repay were monies owed by his wife’s company not to his father’s estate.
Generally, in determining whether a valid loan exists, a court will consider such things as, “whether notes or other written acknowledgments of indebtedness were executed, collateral was given, a method or time for repayment was fixed by agreement and if there exists any evidence of a systematic repayment”. In the absence of an instrument evidencing the transaction, a factual determination must be made as to whether a loan was made. There is no presumption that money, which has been advanced, was advanced as a loan. In fact, it is presumed that the delivery of a check arises from an antecedent debt and is not a loan. The person alleging that a loan was made has the burden of proof.
With respect to the issue of the statute of limitations, “[t]here are two ways in which the statute of limitations may be tolled. One involves part payment and the other a signed acknowledgment”. It is well-settled that an acknowledgment of a debt may be sufficient to toll the statute of limitations. As to an acknowledgment, “it must be a signed written acknowledgment of an existing debt which contains nothing inconsistent with an intention on the part of the debtor to pay it”
The parties agree that the burden is on Petitioner, as the fiduciary of the estate, to establish that the loan existed. Here, there was no evidence of a written note setting forth collateral or a method or time for repayment. Accordingly, in the absence of an instrument evidencing the transaction, a factual determination must be made as to whether a loan was made.
It is well settled that a trier of fact in an evidentiary hearing has the unique ability to make credibility assessments based upon its opportunity to view the witnesses, hear the testimony and observe their demeanor.
The court finds that Oppositor’s testimony was contrived. Oppositor testified in generalities and displayed selective memory and forgetfulness. The court finds the testimony of Petitioner and Patricia to be more credible. Accordingly, the court finds that Petitioner has met his burden of proof that the decedent loaned Oppositor funds in the amount of $80,627.00 reflected on Exhibit 3.
As to Oppositor’s statute of limitations defense, the court finds that the partial payment of $3,400.00 was a payment of an admitted debt, subject to upwards adjustment by Oppositor for the failure to provide receipts. Accordingly, the statute of limitations does not act as a bar to the collection of the debt.
As to the issue of commissions, commissions are not ordinarily payable until the entry of a decree settling a fiduciary’s account. Taking a commission prior to the settlement of an account without securing court approval pursuant to SCPA 2310 or SCPA 2311 exposes the fiduciary to the potential of being charged. Ordinarily, the court will allow the commissions but will surcharge the fiduciary the amount of interest the estate lost because of payment, most commonly at the statutory interest rate under CPLR 5004, from the date the unauthorized commissions were taken until the entry of the decree settling the account.
This court has generally taken the position the taking of advance commissions without prior court approval is grounds for “automatic surcharge at the statutory rate of interest of 9%”.
Considering all the circumstances in this case and the above principles, the court surcharges the executor 9% statutory interest on the amount paid of $10,000.00 from the date taken until the date of repayment.
Thus, Petitioner’s testimony and account show that he (i) withdrew $10,000.00 in commissions without prior court order; (ii) made a $20,000.00 distribution to his company, which he ultimately repaid; and (iii) withdrew $66,000.00 of Oppositor’s share as repayment for an alleged loan Petitioner made to oppositor and paid it to himself.
With respect to the issue of attorneys’ fees, the court bears the ultimate responsibility for approving legal fees that are charged to an estate and has the discretion to determine what constitutes reasonable compensation for legal services rendered in the course of an estate. While there is no hard and fast rule to calculate reasonable compensation to an attorney in every case, the Surrogate is required to exercise his or her authority “with reason, proper discretion and not arbitrarily”.
In evaluating the cost of legal services, the court may consider a number of factors. These include: the time spent; the complexity of the questions involved; the amount of litigation required; the amounts involved and the benefit resulting from the execution of such services; the lawyer’s experience and reputation; and the customary fee charged by the Bar for similar services. In discharging this duty to review fees, the court cannot apply a selected few factors which might be more favorable to one position or another but must strike a balance by considering all of the elements set forth in a case. Also, the legal fee must bear a reasonable relationship to the size of the estate. A sizeable estate permits adequate compensation, but nothing beyond that. Moreover, the size of the estate can operate as a limitation on the fees payable, without constituting an adverse reflection on the services provided.
The burden with respect to establishing the reasonable value of legal services performed rests on the attorney performing those services. Contemporaneous records of legal time spent on estate matters are important to the court in determining whether the amount of time spent was reasonable for the various tasks performed.
With respect to disbursements, the tradition in Surrogate’s Court practice is that the attorney may not be reimbursed for expenses that the court normally considers to be part of overhead, such as photocopying, postage, telephone calls, and other items of the same matter, this court discussed the allowance of charges for photocopies, telephone calls, postage, messengers and couriers, express deliveries and computer-assisted legal research. The court concluded that it would permit reimbursement for such disbursements only if they involved payment to an outside supplier of goods and services, adopting the standards set forth in a case. The court prohibited reimbursement for ordinary postage and telephone charges other than long distance.
The attorney has submitted an affirmation of legal services and a supplemental affirmation of legal services which shows that the attorney rendered approximately 110 hours at the hourly rate of $350.00 per hour for a total of $36,000.00 plus a flat fee of $10,000.00 for preparation of the accounting. The services performed by counsel included services in connection with the probate of the will; services with respect to the sale of two properties owned by the decedent; review of the antenuptial agreement between decedent and his spouse; review of appraisals; drafting federal estate tax return; appearances at court conferences; preparation of the accounting, work in connection with the Supreme Court proceeding; preparation for trial and conducting of trial. In addition, disbursements incurred amount to $1,911.15 consisting of filing fees, certified mailings, process serving fees and fees for certificates of letters.
Considering all of the factors used to determine the reasonableness of fees, the court fixes the fee of counsel for the executor in the amount of $35,000.00, plus disbursements in the amount of $1,911.15.
Probate of a last will and testament is a court proceeding wherein a will is presented in order that the provisions embodied in it will be effective. Our Kings County Probate Attorneys here in Stephen Bilkis and associates will represent the executor of the will for court’s consideration. For other matters, you can also consult our Kings County Estate Lawyers.