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Court Determines Legal Fees in Estate Litigation

In this Estate Litigation, the decedent, died in October 1999. Her will on 1997 was admitted to probate in April 2000. Letters testamentary issued to the decedent’s son. The son died in May 2002. Following his death, successor letters testamentary issued to the administrator in June 2002.
A Nassau County Estate attorney said that under Article THIRD of her will, the decedent bequeathed her residuary estate to her surviving issue subject to trusts created under Articles FOURTH, FIFTH and SIXTH. The decedent was survived by her son, a daughter, and a granddaughter, who is the daughter of the decedent’s predeceased daughter. Pursuant to the will, the share for the decedent’s son was set apart for his benefit in trust to be administered in accordance with the provisions of Article FOURTH. Letters of trusteeship issued to the son and another as trustees of the Article FOURTH trust. Pursuant to the terms of the trust for son, the trust terminated upon the son’s death and the then principal and income became payable to his surviving issue, subject to further trusts for any such issue under the age of thirty-five.

A New York Probate Lawyer said the son was survived by two children who are under the age of 35 and, therefore, separate trusts were created for the benefit of each pursuant to Article SIXTH. Letters of trusteeship issued to the daughter as trustee of the trusts for the benefit of the son’s children.

The attorney for the successor executor of the estate of the deceased filed an affirmation requesting that a reserve of $43,039.42 be maintained by the surviving trustee of the Article FOURTH trust in order to pay certain administration expenses and to cover certain distributions, the son made to himself. That request was partially opposed by the trustee of the Article FOURTH trust who argued that distributions which the son, as executor, allegedly made to himself individually would not be properly chargeable to the Article FOURTH trust. The parties entered into a stipulation wherein the parties have resolved the objections raised by the successor executor. Being satisfied that the terms of the stipulation are fair and further the ward’s best interests, the court authorizes the guardian ad litem to execute the stipulation.

A New York Will Lawyer said 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 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. 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.

A Westchester County 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.

These factors apply equally to an attorney retained by a fiduciary or to a court-appointed guardian ad litem. Moreover, the nature of the role played by the guardian ad litem is an additional consideration in determining his or her fee.

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. A Suffolk County Probate Lawyer said 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.

With respect to accountants’ fees, normally, an accountant’s services are not compensable out of estate assets unless there exist 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. “[T]he 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 “.

Counsel for the surviving trustee has submitted to the court an affirmation in support of her fee application as well as a supplemental affirmation. The affirmations show that the attorney rendered more than 119 hours at various hourly rates. The fees of the attorney’s fine total $36,202.30, which includes disbursements, and which represents approximately nine percent (9%) of the principal charges. The attorney has been paid $33,616.03. The court notes some duplication of services by attorneys at the attorney’s firm. There are some entries for secretarial work, such as faxing and copying, which should be part of overhead. In addition, it appears that the only contested issue with respect to the accounting concerned the amount of the reserve. The affirmations also include time entries for time spent on preparation of the affirmations in support of the fee application. Time spent on an attorney’s fee application is not compensable. In addition, a number of time entries include time spent traveling to court for court appearances which is not compensable. The fee requested also includes copying charges of $392.68. There is no indication whether the copying was done by an outside supplier.

Accordingly, the amount is disallowed. Similarly, transportation costs totaling $49.00 are considered part of office overhead and are disallowed. Considering all of the factors in determining the reasonableness of attorneys’ fees, the court approves a total fee in the amount of $25,000.00, inclusive of disbursements, as fair and proper compensation for the services rendered. Any sums paid in excess of this amount shall be refunded to the trustee.

The attorney for the deceased co-trustee has submitted an affirmation with respect to services her firm rendered to the deceased co-trustee. According to counsel, her firm rendered 22 hours of legal services to the trustee for a total fee of $5,960.00, which has been paid in full. A review of the time sheets annexed to counsel’s affidavit indicates that travel time was included. Travel time is not compensable. Moreover, time spent in connection with obtaining the requisite documentation to make funeral arrangements for Lewis is not properly chargeable to the trust. Considering all of the factors in determining the reasonableness of attorneys’ fees, the court approves a total fee in the amount of $4,500 as fair and proper compensation for the services rendered. Any sums paid in excess of this amount shall be refunded to the trustee.

Concerning the guardian ad litem’s fee, the guardian ad litem has submitted an affirmation of services wherein he avers that he spent 50-1/4 hours at his hourly rate of $250/hour for a total of $12,562.00. The guardian ad litem notes that even though he was not appointed as guardian ad litem in the accounting proceeding for the estate, in order to determine if the Article FOURTH trust was properly funded, he reviewed pertinent records of the estate. A review of the time sheets annexed to the guardian ad litem’s report includes time spent delivering his report to the court and preparing his affirmation in support of his fee. The services performed by the guardian ad litem were of the utmost quality. Nevertheless, the court is constrained by the size of the trust. Accordingly, the court approves a fee for the guardian ad litem in the amount of $8,500.00, which shall be paid within thirty (30) days of the decree to be entered herein.

Probate proceedings should be handled by lawyers who have diligent and conscientious mind. Here in Stephen Bilkis and Associates, our Nassau County Probate attorneys will make it a point that the estate of a testator will be divided according to decedent’s desire. Our Nassau County Estate lawyers will render and advice as to promote testacy rather than intestacy to respect the last will and testament of a decedent.

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