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Court Interpretes Living Trust

There are three proceedings pending in the estate of the decedent: (1) a miscellaneous proceeding to declare the decedent’s Living Trust dated March 19, 2001 invalid; (2) a proceeding to probate an instrument dated March 19, 2001 as the decedent’s last will and testament; and (3) a proceeding by respondent as trustee of the decedent’s Living Trust dated March 19, 2001, to judicially settle his account for the period from March 19, 2001 to May 9, 2007. On July 1, 2010, the court appointed a guardian ad litem for one of the decedent’s daughters, in all three proceedings.

The decedent died on May 9, 2007, survived by four distributees: two daughters, a son; and a granddaughter, the only child of the decedent’s predeceased son. The propounded will pours over to the living trust. The living trust provides only for the son, specifically omits the two daughters, and does not mention the granddaughter.

A Kings County Probate Lawyer said that, the guardian ad litem has filed a preliminary report in which he details his findings to date and, based upon them, recommends that he continue to represent his ward’s interests in all three proceedings. The guardian ad litem reports that the daughter has alleged that the son exerted undue influence and fraud upon the decedent at a time when he was physically ill and depressed. The guardian ad litem states that, based on his investigation, he deems it appropriate to participate in the SCPA 1404 examinations in the probate proceeding and to continue to represent his ward’s interests in all three proceedings. The court agrees with his conclusions.

The guardian ad litem has asked the court to award an interim fee for the services he provided through the filing of his preliminary report. 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 the administration 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. These include the time spent; the complexity of the questions involved; the nature of the services provided; the amount and complexity 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. Also, the legal fee must bear a reasonable relationship to the size of the estate and to the interest of the ward of the guardian ad litem. Moreover, it is well-settled that time spent is, in fact, the least important factor considered by a court in fixing reasonable compensation.

A sizeable estate permits adequate compensation, but nothing beyond that. A large estate does not, by itself, justify a large fee. Further, 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 the determining whether the amount of time spent was reasonable for the various tasks performed.

The guardian ad litem is entitled to a fee for his or her services rendered (SCPA 405). The nature of the role played by the guardian ad litem is an additional consideration in determining his or her fee. Normally, the fee of a guardian ad litem is an administration expense of an estate and is paid from estate assets.

The guardian ad litem has filed an affirmation of legal services in which he states that he dedicated 12 hours of time to these proceedings. His time included reviewing the three court files, meeting with one of the parties, communicating with the other parties’ attorneys, preparing correspondence, locating the witnesses to the propounded will, and preparing his preliminary report. The guardian ad litem, who is an experienced attorney, informs the court that his usual hourly billing rate is $350.00. Based on the criteria set forth above, the court fixes the guardian ad litem’s fee at $4,200.00, said fee to be paid within 30 days of entry of the decree of probate.

If you need help in the administration of the estate, seek legal assistance of Stephen Bilkis and Associates.

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