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Court Decides on Payments to Ancillary Executor

The woman died leaving a Will. At the time of her death, the woman was a resident of Florida and supplementary letters of estate administration were issued to the executor of the estate. The accounting covers the period May 3, 2004 to April 21, 2009. An amended accounting covering the period May 3, 2004 to December 22, 2009 was filed on February 5, 2010. The amended accounting shows principal charges to the accounting party of $829,804.35.

Objections to the accounting and the amended accounting were filed by the $10,000.00 legatee and the beneficiary of fifty percent (50%) of the residuary properties. The ancillary executor is the beneficiary of the other fifty percent (50%) share of the residuary properties. By documents dated December 2, 2010, the executor withdrew his objections to both the first account and the amended account.

A New York Probate Lawyer said 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. It include the time spent, the complexity of the questions involved, the nature of the services provided, the amount of estate 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 the 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. Also, the legal fee must bear a reasonable relationship to the size of the property. Queens Probate Lawyers said sizeable property permits adequate compensation, but nothing beyond that. Moreover, the size of the property 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 the services. Contemporaneous records of legal time spent on property 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, 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. The court prohibited reimbursement for ordinary postage and telephone charges other than long distance.

The attorney has submitted an affirmation of legal services, without contemporaneous time records. According to the attorney’s affirmation, he spent 171.1 hours on this matter at the hourly rate of $275.00 per hour for a total fee of $47,052.56, $25,435.00 of which has been paid and $22,117.00 of which remains unpaid. The attorney also charged a $500.00 flat fee to handle and supervise the delivery and inspection of oil paintings. The attorney also seeks $45.00 for expenses, but has not provided any detail as to the nature of the expenses.

It has consistently been held that the court has the discretion to review the reasonableness of an attorney’s fee on an accounting whether or not anyone objects to the fee. A Staten Island Probate Lawyer said the services performed by counsel as recited in his affirmation include time spent on the preparation of his affirmation of legal services. Time spent by counsel supporting his fee is not compensable. In addition, the time spent on some services appears excessive. For example, counsel claims to have spent in excess of twenty-three hours preparing Federal and New York State estate tax returns. The affirmation includes generalized descriptions of services such as 17.8 hours on meetings concerning renunciation by residuary beneficiary and primary Executrix-client and property beneficiaries meetings, correspondence, telephone calls. In addition, counsel charged for work done in connection with the Florida probate proceeding which is duplicative of the work performed by Florida counsel. It is a general rule that an attorney will not be allowed legal fees for performing executorial services. Accordingly, for the above reasons, the court fixes the fee of counsel in the amount of $35,000.00. The request for $45.00 in expenses is disallowed since counsel has failed to identify the nature of the expense.

The accounting also includes a request for reimbursement to the ancillary executor for expenses and mileage for trips to the property in an amount in excess of $3,000.00. The court notes that the opponent was represented by counsel and voluntarily withdrew his objections to the expenses. Nevertheless, the court declines to approve the expenses, which appear excessive and for which no supporting documentation is provided.

It also appears that the ancillary executor took an advance payment of commissions without prior court approval. The objections filed sought the denial of commissions to the ancillary executor in their entirety for mismanagement of the property and did not include a specific objection to the advance payment.

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 exposes the fiduciary to the danger of being surcharged. Usually the court allows the commissions but surcharges the fiduciary the amount of interest the estate lost because of payment, most commonly the statutory interest rate from the date the unauthorized commissions were taken until the entry of the decree settling the account.
There is some division between the Surrogates on the issue of whether there must be an interest surcharge on the advance payment of commissions even where all of the beneficiaries consent to approval of the advance in a nunc pro tunc order or an order that applies to acts that are allowed to be done after the time expires as well as clarify how those assets were meant to be distributed.
An intermediate position was taken by then Surrogate Prudenti who held that a fiduciary’s violation cannot be condoned and will ordinarily result in surcharge for the unauthorized payment at the legal rate of interest in order to protect the rule and deter advances without court orders, but such advances can be excused in certain extraordinary circumstances.
The court has generally taken the position that the taking of advance commissions without prior court approval is grounds for automatic surcharge. Considering all the circumstances and the above principles, the court surcharges the ancillary executor 9% statutory interest on the amount paid of $12,594.50 from the date taken of January 3, 2006 until the date of the decree. The surcharge shall be charged against the balance of the commissions due the ancillary executor. In all other respects, the accounting is approved.
We all have legal obligations to the government. All payments that we make are being used to make sure that the government has the resources to perform its duties in running the country. If you believe that you need legal assistance, consult a Kings County Estate Lawyer together with a Kings County Estate Administration Attorney. Stephen Bilkis and Associates can also provide you with a Kings County Probate Lawyer to help you with your Will related lawsuits.

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