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Court Decides Payment of Legal Fees for Administration of an Estate

A resident of Uniondale, on 26 December 1998, died. The decedent left a will dated 15 June 1979 which bequeathed her entire residuary estate to her nephew, who post-deceased the decedent. The Public Administrator was appointed temporary administrator of the estate on 14 April 2005. Decedent’s will was admitted to probate (estate litigation or will contest) on 11 May 2010 and letters of administration were issued, thereafter, to the Public Administrator. The account of the Public Administrator was initially filed on 6 July 2010.

A New York Probate Lawyer said the subject matter presented before the court is the first and final account of the Public Administrator for the estate of the decedent and the approval of the payment of fees to the attorney for the Public Administrator in connection with the administration of the estate (estate administration).

The Public Administrator sought the approval of the accounting, approval of the commissions, the fixing of fees for the services of the attorney and accountant, authorization to distribute the net estate to the court appointed administrator of the estate and the release of the administrator from the surety bond.

With regard to the fee of the attorney for the estate, the court has ruled, time and again, that it 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. A Staten Island Probate Lawyer said while there is no hard and fast rule to calculate reasonable compensation to an attorney in every case, the court is required to exercise his or her authority “with reason, proper discretion and not arbitrarily.

The factors to be considered in assessing the cost of legal services are – the time spent, the complexity of the questions involved, the nature of the services provided, 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. The calculated fee must strike a balance by considering all of the elements set forth above. In addition, the legal fee must bear a reasonable relationship to the size of the estate. A sizeable estate permits adequate compensation, but nothing beyond that. What’s more, 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 to prove the reasonable value of legal services performed rests on the attorney performing those services.

The contemporaneous records of legal time spent on estate matters are important in determining whether the amount of time spent was reasonable for the various tasks performed. A review of the affirmation of services and the time records submitted to the court showed that the attorney devoted more than 156 hours. A Suffolk County Probate Lawyer said the legal services required by this estate were unusually extensive, and the summary of the legal work provided by the attorney fills more than two full pages. The billable fees totaled $30,633.63, exclusive of the real estate fee, of which $13,402.50 has been paid and $17,231.13 remains unpaid, and the firm expects that the estate will incur additional charges of $2,500.00. In view of the modest size of the estate, the attorney has offered to accept as a total fee the amount paid to date, $13,402.50, in addition to the real estate fee of $1,500.00. The attorney’s skillful representation of the Public Administrator and the voluntary reduction of his fee is applauded by the court. Hence, the fee has been approved in the amount requested.

On the review of the accountant’s fees, normally, an accountant’s services are not compensable from estate assets unless some unusual circumstances exists 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 to avoid duplication. As ruled, “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”. An affidavit of services was then presented by the accountant requesting a fee of $1,950.00 for the preparation of the estate’s annual federal and state fiduciary income tax returns to date. The court finds that the work performed by the accountant was not duplicative of the services rendered by the estate attorney, and the requested amount for these services was reasonable. Wherefore, the court has approved the fee in the amount of $1,950.00.

A commission for the administrator c.t.a. has also been awarded subject to audit, the surety discharged and the Public Administrator has been ordered to distribute the balance of the net estate to the court appointed administrator.

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