Klenk Law

Montgomery County Orphans’ Court Judge Scrutinizes Executor and Attorney Fees

Posted on Fri Jan 16, 2015, on Fees

We posted recently about attorney’s fees in Pennsylvania. Let’s take a look at how a dispute over fees actually plays out.

A Montgomery County Orphans’ Court case, DeVitis Estate, is a cautionary tale for executors. It shows what judges will do when faced with unexplained fees. In this case, the deceased named her daughter executor of the estate. Due to perceived foul play, two beneficiaries of the estate requested an audit of the estate and then filed objections to the accounting.

One objection involved the executors and attorney’s fees paid by the estate. In this instance the residuary was insufficient to cover the assessed fees. To pay for the fee, the executrix sold off the decedent’s residence and used the sale money to cover these expenses. The challenging beneficiaries’ inheritance was directly reduced by this maneuver.

At trial, the executor failed to provide evidence justifying her commission or the attorney’s fees. This did not mean she was entitled to no fee, as an executor is statutorily entitled to reasonable and just compensation. However, without a detailed explanation of the fee, the judge simply assumed the estate was plain vanilla. The judge concluded the executor and attorney did no special work above and beyond that of a typical estate.

If you read the previous post on fees, you may remember the Johnson fee schedule. It’s an unofficial schedule attached to a Delaware County Orphans’ Court Judge’s opinion from 1983. It remains widely used by attorneys and judges as an estate administration fee benchmark. The executrix in DeVitis learned exactly how persuasive that benchmark remains.

The judge calculated the Johnson executor and attorney fee. Then compared it with the fee charged in the case. Both the Executor and Attorney had been paid 50% more than the suggested Johnson fee. Since no evidence was provided to explain the increased fee, the enhanced fee was reduced. Instead, the fees were set in accordance with Johnson and the executrix had to personally repay the estate both her and the attorney’s excess fees. This typical and costly result should give executors pause at the outset to ensure the estate’s attorney is knowledgeable and experienced in probate matters.

If you need assistance with probate or with developing your Estate Plan, please call one of our Probate Lawyers or Estate Planning Attorneys for a free consultation. We have Estate Planning Attorneys in New Jersey, Pennsylvania, New York, Minnesota and Florida.

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Montgomery County, Pennsylvania

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