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Court Determines Apportionment of Legal Fees in Estate Administration Case

A New York Probate Lawyer said the woman died survived by one sister and thirteen descendants of pre-deceased siblings. The deceased woman’s nephew, the Executor filed a Verified Petition to Probate a Last Will and Testament, dated April 17, 1996 in which he was the nominated Executor and in which he and his two siblings were named as the sole residuary beneficiaries. The Executor was granted Preliminary Letters Testamentary on October 29, 2009. Included in his Petition for Probate was an assertion by the decedent’s Executor that, after a diligent search and inquiry there exists no will, codicil or other testamentary instrument of the decedent later in date. The Petition also listed only the decedent’s one surviving sibling, and the Petitioner and his two sisters, omitting ten of the decedent’s distributees, all cousins of the Executor.

The decedent’s one surviving sister and the ten distributees left out of the Petition for Probate, six nieces and nephews and four great-nieces and nephews of the decedent (Objectants), jointly retained their counsel and conducted an investigation that ultimately determined that the April 17, 1996 will probated by the Executor was not the decedent’s Last Will and Testament.

A New York Estate Lawyer said the evidence was adduced that the decedent had executed a Last Will and Testament on July 11, 2000 and subsequently intentionally destroyed it. As the July 11, 2000 will revoked all prior wills of the decedent, its destruction would, in the absence of a subsequent will, result in the decedent’s property passing pursuant to the laws of intestacy and the Executor not being named as executor. Accordingly, on December 1, 2009, the Objectants filed a Verified Answer to the Executor’s Petition for Probate and Objections to the Probate of the April 17, 1996 Will.

Long Island Probate Lawyers said the Executor did not concede to the validity of the July 11, 2000 will, and estate litigation commenced. The Objectants’ counsel secured affidavits from the draftsman of the later will, the attorney who oversaw its later destruction, and witnesses to the will’s execution and destruction. These parties were then deposed by the Executor’s counsel to ascertain if the decedent was mentally competent, under undue influence, duress, or if her actions were the product of fraud. No evidence of a lack of testamentary capacity was adduced at the five depositions conducted by the Executor’s counsel. However, the Executor continued to challenge the validity of the later will and claim that the decedent lacked testamentary capacity at its execution, causing a subpoena duces tecum to be issued seeking the decedent’s medical records.

On August 12, 2010, after over a year of estate litigation regarding the validity of the July 11, 2000 will, when it became apparent that the Objectants were about to file an Estate Administration petition, the Executor suddenly located and filed a third will of the decedent, dated October 20, 2005. This will named the nephew as Executor and divided the residuary into two shares, twenty percent to be divided among various charities, and the remaining eighty percent is to be distributed in various shares to ten family members, excluding only four distributees, great-nieces and great-nephews of the decedent. While the Executor had vehemently doubted the decedent’s capacity to execute a will in 2000, he did not raise issues of the decedent’s competence at the execution of the 2005 will. The October 20, 2005 will was admitted to Probate on November 24, 2010, and the Executor was issued full Letters Testamentary.

On November 5, 2010, the instant proceeding was commenced when the Objectants’ counsel filed a Petition to Fix and Determine Compensation, requesting fees in the amount of $24,853.61 and disbursements in the amount of $1,721.39 to be paid from the Estate of the decedent, alleging that if not for their efforts, the invalid April 17, 1996 will would have been admitted to probate, unjustly enriching the Executor and his siblings to the detriment of the rightful beneficiaries. The fee requested reflects over 175 hours of attorney and paralegal time incurred since August, 2009.

Queens Probate Lawyers said that on January 7, 2011, Verified Objections to the Petition were filed by the Attorney General of the State of New York on behalf of the ultimate charitable beneficiaries under the October 20, 2005 will. The Attorney General alleges that the Objectants acted primarily in their own interest, that their actions did not enlarge the Estate itself, and that they cannot take credit for finding the will admitted to Probate. The Attorney General also proposes that if the Objectants’ legal fees should be borne by anyone, it is the Executor, due to his malfeasance. While the Attorney General does not represent the Objectants, and in any case, they do not object to the Petition for legal fees, the Attorney General also raises the argument that to pay the legal fees out of the Estate would result in the potentially unjust result of only the four non-legatee Objectants, great-nieces and nephews, being made whole, while the legacies of the seven legatee Objectants would be diminished.

In response to both the Petition and the Objections, the Executor and his counsel filed Affidavits on January 18, 2011. In his Affidavit, the Executor does not claim to have lacked knowledge regarding the existence of his ten cousins upon the filing of his petition for probate, but denies any wrongdoing, claiming that he was right to question the July 11, 2000 will, as it was sketchy, contained misspellings, and was allegedly prepared by an attorney whose office was more than fifty miles from the decedent’s home. Additionally, the Executor claims that a copy of the October 20, 2005 will was not among the decedent’s papers, and it was only after an exhaustive review of her records that he found a checkbook ledger notation for a check paid to another counsel. When contacted, the counsel disclosed that he had drafted and kept the October 20, 2005 will in his files after providing the decedent with a copy for her records. The Executor’s Affidavit reiterates these same claims, and argues that if legal fees are to be awarded from the Estate, the fees should be paid at the hourly rate agreed upon by the Executor and his counsel – less than the hourly rate charged by the Objectants’ counsel.

For reasons further detailed below, the Court finds that adequate evidence was presented by the Objectants’ counsel to justify the amount of fees sought. Further, due to the circumstances surrounding the delayed discovery of the proper will, these fees shall be paid in equal shares by the Estate and the Executor personally.

After a review of the affirmation of services included within the Petition, and taking note of the discount already granted the Objectants by their counsel, the Court declines to decrease the fees requested.

Surrogate’s Court Procedure Act (SCPA) authorizes the Surrogate to, fix and determine the compensation of an attorney for services rendered to a fiduciary or to a devisee, legatee, distributee or any person interested, and to direct payment of the fees, from the estate generally or from the funds in the hands of the fiduciary belonging to any person interested. Further, SCPA places it within the Court’s discretion to provide that costs be made payable by any party personally. The Attorney General relies heavily on a similar case to argue that the discretion granted the Court by SCPA to grant the attorneys’ fees is limited solely to those instances in which the fees were not incurred primarily for the benefit of a client, and resulted in a greater distribution than might have otherwise been expected. While that is one circumstance under which attorneys’ fees may be granted, and importantly, the situation confronted by the court is not exclusive, nor was it contemplated to be so.

The work of the attorneys to whom fees are granted must benefit the estate, but that benefit is not limited solely to a monetary increase in the estate value. For example, establishing the kinship of distributees of the decedent has been considered a benefit to the estate entitling legal fees to be paid from the estate.

Based on the circumstances, the Court has no choice but to find the ninth hour discovery of the decedent’s final Will by the Executor to be suspicious. An entire year of estate litigation preceded that discovery, during which the Executor made numerous claims that the decedent lacked testamentary capacity, even attempting to obtain medical records to support that claim.

However, a will drafted more than five years later, when the decedent was 89 years old raised no such issues with the Executor. The Executor’s self-serving actions raised justifiable doubt in the eyes of the Objectants, and they acted to the benefit of the Estate as a whole.

As for the portion of interest in the Estate held by the non-objecting beneficiaries’ relative to the objecting beneficiaries; under the final Will, all of the decedent’s legatee family members are entitled to between five and sixteen percent of the residuary. The Executor and his siblings, the only non-objecting beneficiaries, are each entitled to approximately five percent of the residuary, the same amount as three of the objecting beneficiaries.

While the Objectants acted in apparent good faith, with justification, and to the benefit of the Estate as a whole, the Estate should not bear the entire burden of the lengthy estate litigation. The courts have, in numerous instances, held a fiduciary liable for the attorney’s fees and other expenses incurred by the estate in exposing his misconduct. The Surrogate’s Court is empowered to charge an administrator personally for legal expenses incurred in establishing the latter’s wrongdoing.

As the Objectants’ actions were required due to the Executor’s inability to timely produce the proper will of the decedent, and his voracious opposition to a will that entitled him to a lesser share of the Estate, he should be personally responsible for the costs of that estate litigation. It is unascertainable what portion of the accrued legal fees are attributable to the location of the proper will and what portion are attributable to the frivolous estate litigation, so in the interests of equity, the fee shall be split in equal shares among the Estate as a whole and the Executor personally.

Further, the Executor must be removed as Executor and shall forfeit any commissions due him for services rendered to the Estate thus far. Therefore, in accordance with the above decision it is hereby ordered and adjudged and decreed that the attorneys’ fees, costs and expenses in the amount of $13,287.50 be paid by the Estate to the Objectants’ counsel within thirty days, said funds to be immediately used to reimburse the legal fees, costs and expenses previously paid to the Objectants’ counsel for representation in this matter. The attorneys’ fees, costs and expenses in the amount of $13,287.50 to be paid by the Executor to the Objectants’ counsel within thirty days, said funds to be immediately used to reimburse the legal fees, costs and expenses previously paid to the Objectants’ counsel for representation in this matter. The Letters Testamentary Issued by the Court to the Executor is revoked and he shall forfeit receipt of commissions.

Estate litigation or any kind of litigation is lengthy and financially draining. If you are contemplating in pursuing a probate proceeding, the Bronx County Probate Lawyer can be of great help in winning your case. Stephen Bilkis and Associates also offer the services of the Bronx County Estate Administration Attorney and Bronx County Estate Litigation Lawyer.

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