Submitted for decision in this intermediate accounting proceeding is the issue of fees and commissions.
On 6 October 1999, A died. She left a will dated 8 August 1997. On 11 April 2000, the will was admitted to probate and on the same date, a letters testamentary was issued to B, her son. B died on 6 May 2002. This is an intermediate accounting by C as executor of the estate of the deceased executor B. The accounting covers the period from 6 October 1999 through 6 May 2002. The summary statement shows charges to the accounting party of $2,384,134.60.
A New York Probate Lawyer said that with respect to the issue of attorney 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 fees rendered in the course of an estate as held in Matter of Stortecky v Mazzone. 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 as held in Matter of Brehm.
A New York City Probate Attorney said in evaluating the cost of legal services, the court may consider a number of factors. These include: the time spent (Matter of Kelly); the complexity of the questions involved (Matter of Coughlin); the nature of the services provided (Matter of Von Hole); the amount of litigation required (Matter of Sabatino); the amounts involved and the benefit resulting from the execution of such services (Matter of Shalman); the lawyer’s experience and reputation (Matter of Brehm); and the customary fee charged by the Bar for similar services (Matter of Potts). 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 Matter of Potts and as re-enunciated in Matter of Freeman. Also, the legal fee must bear a reasonable relationship to the size of the estate (Matter of Kaufmann). 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 (Matter of McCranor and Matter of Kaufmann), without constituting an adverse reflection on the services provided.
A Manhattan Probate Lawyer said 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 regard 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 as held in Matter of Graham. In Matter of Coewith, the 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 Matter of Herlinger. The court prohibited reimbursement for ordinary postage and telephone charges other than long distance.
The attorney for the executor of the estate of the deceased fiduciary has supplied the court with an affirmation in support of his fee. The attorney seeks a total fee of $6,283.87, of which $1,500.00 has been paid by the petitioner personally. The proposed fee includes time the attorney anticipates as necessary to bring this matter to a conclusion. The attorney performed services at the hourly rate of $175.00. It appears from a review of the time records that 1.6 hours on 8 January 2007 was spent on preparation of the affirmation in support of counsel’s fee, which is not compensable as held in Matter of Farrell. Accordingly, the court fixes the reasonable value of the services rendered by counsel in the amount of $6,003.87, $1,500.00 of which has been paid by the accounting party personally and shall be refunded to her by the estate.
Concerning the disbursements paid, it appears that total disbursements in the amount of $1,828.97 were paid consisting of $1,250.00 in filing fees paid by the accounting party personally, $500.00 to an accounting firm for “Review Estate Accounting, Summary Report Issued”, $35.45 for postage and $43.52 to the Morris County Sheriff. The fee for postage is disallowed. With respect to the accountant’s fee, normally accountant’s services are not compensable out of estate assets unless there exists unusual circumstances that require the expertise of an accountant. The fee for such services is generally held to be included in the fee of the attorney for the fiduciary. As pointed out by Warren’s Heaton on Surrogate’s Court Practice, at §93.08, the purpose of this rule is to avoid duplication. Where the legal fees do not include compensation for services rendered by the accountant, there is no duplication and the legal fee is not automatically reduced by the accounting fee. Here, there appears to be no duplication of services. Accordingly, total disbursements in the amount of $1,793.47 are approved. The filing fees of $1,250.00 shall be refunded to the accounting party out of the estate.
The court has been supplied with an affidavit of legal services by the attorney for the deceased executor concerning the services rendered to him in his capacity as executor. According to him, attorneys and legal assistants in her firm rendered approximately 437 hours of legal services to the estate for a total of $95,391.80, all of which has been paid. The firm also incurred disbursements of $2,037.00. Counsel states that, during the course of estate administration, a number of complicated and unforeseeable issues arose that took a great deal of time to resolve. The services counsel performed included the following: prepared the probate petition and petition for preliminary letters testamentary, conferred with guardian ad litem appointed in the probate proceeding, assisted with marshaling estate assets and establishing brokerage and checking accounts, advised executor of his duties, conferred with executor’s financial advisers, procured agreement among beneficiaries as to the division of the decedent’s tangible personal property, prepared letters of authorization to allow brokers and potential purchasers to enter the decedent’s home, assisted with the sale of the decedent’s house including arranging for renovations in connection with the sale, advised the executor in obtaining his sister’s cooperation in connection with the sale, negotiated and prepared the contract of sale and attended the closing, researched possible cause of action for wrongful death, analyzed post-mortem tax planning, prepared and filed federal and New York State estate tax returns, represented the executor in the audit of the decedent’s federal estate tax return, conferred with the accountant with respect to the decedent’s final income tax returns and the estate’s fiduciary income tax returns, prepared a receipt and release for the charitable bequest, and assisted the beneficiaries of the decedent’s IRA as to the payouts.
According to counsel, a great deal of time and attention was devoted to addressing issues raised by E’s irresponsible and difficult behavior. Counsel states that because of the beneficiary’s behavior, her firm performed services that far exceeded those typically required in estate administration. This additional work included convincing E to vacate the premises and assisting her in finding a suitable home.
The guardian ad litem appointed in the accounting proceeding for the trust has submitted a report wherein he states that in order to perform a comprehensive review of the trust accounting, it was necessary for him to review the estate accounting. The guardian ad litem comments that the estate should have been a relatively simple estate to administer and that there appeared to be no unusual legal problems.
It appears that some of the work performed was executorial in nature. The law is clear that an attorney will not be allowed legal fees for performing executorial services as held in Matter of Jones. Considering all these factors, the court fixes the fee of counsel to the deceased fiduciary in the amount of $90,000.00. Any sums paid in excess of that amount shall be refunded to the estate. Disbursements for photocopies, facsimile charges, and ordinary postage are disallowed. Accordingly, disbursements in the amount of $1,394.18 are approved.
Do you find yourself similarly situated? If so, call our toll free number or visit our firm at locations near you. Nassau County Probate Lawyers, Nassau County Estate Litigation Lawyers or Nassau County Will Contest Lawyers at Stephen Bilkis & Associates are ready to help. Consultations with us are free of charge.