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Court Decides if Accounting Fees Should be Granted

A New York Probate Lawyer said that, submitted for decision in this accounting proceeding are the issues of attorney fees and accounting fees. Also submitted is approval of commissions to the Public Administrator. The Public Administrator also asks for approval of the disallowance of the claim of the niece of the decedent’s wife for reimbursement of travel expenses to attend the decedent’s funeral. The Public Administrator also requests authorization to pay the net estate to the Nassau County Department of Social Services.

A New York Will Lawyer said that, the decedent died on January 7, 2004, a resident of Nassau County. Letters of administration issued to the Public Administrator on April 7, 2004. The decedent’s only distributees were a nephew, and a niece. This is the Public Administrator’s first and final account. The summary statement shows charges to the accounting party of $100,656.86.
A Nassau Probate Lawyer said that, the decedent’s wife, predeceased the decedent having died on November 22, 2002. Upon her death, she was indebted to the Nassau County Department of Social Services in the amount of $177,320.57. Pursuant to Section 104 (1) of the Social Services Law of the Estate of New York, the Nassau County Department of Social Services is entitled to recover the cost of the care given to the decedent’s spouse from the decedent’s estate.

The issue in this case is whether the accounting fees of the estate proceeding should be granted.

Manhattan Probate Lawyers said 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 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”.

Bronx Probate Lawyers 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 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. 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 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. “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.

In this case, the attorney has supplied the court with an affirmation of services. As of May 31, 2007, the firm billed and was paid $7,216.75 in attorney’s fees. Since then, the estate has incurred additional fees of $7,110.17, all of which remains unpaid. The firm also expects at least an additional $1,500.00 in attorney’s fees to conclude the administration. Notwithstanding this, counsel requests, due to the limited size of the estate, that the court fix his firm’s fee in the reduced amount of $7,216.75, all of which has been paid.

The services rendered include, but are not limited to, preparation and filing of the petition for letters of administration and related papers, conferences with Nassau County Department of Social Services, research of Social Services Law, and preparation of the judicial account and related papers. The court notes that the summary of services provided in the affirmation erroneously recites that counsel attended “kinship hearings.” There were no kinship hearings held for the estate. A review of the contemporaneous time records annexed to the affirmation indicates that there are no charges for attendance at a kinship hearing and that the estate, in fact, was not billed for such services.

Considering all of these factors, the court fixes the total fee of counsel for the Public Administrator in the amount of $7,216.75, all of which has been paid. The accountant has submitted an affidavit which shows accounting fees of $3,350.00 of which $2,775.00 has been paid and $575.00 remains unpaid. The accountant prepared the estate’s income tax returns for the years 2004, 2005, 2006, 2007 and 2008. The use of an accountant in this instance appears to be reasonable. Accordingly, the court approves accounting fees in the amount of $3,350.00.
Accordingly, the court held that the claim by the niece of the decedent’s predeceased wife, for reimbursement of travel expenses in the amount of $2,143.57 to attend the decedent’s funeral is denied. After payment of the above expenses, the Public Administrator shall distribute the net estate to Nassau County Department of Social Services in full satisfaction of its claim against the decedent’s estate. Commissions are approved subject to audit. The surety, Liberty Mutual Insurance Company, is released and discharged.

If you are having problems with your accounting fees in an estate proceeding, seek the help of a Nassau Probate Attorney and Nassau Estate Litigation Attorney at Stephen Bilkis and Associates.

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