help with questionable attourney

[keh1]

What is the name of your state? New York

I think I am about to have a dispute with the attourney about fees, which unfortunately were not covered by a written agreement. I am looking for confirmation that I do not owe him what he claims.

My father and I were named co-executors of my mother's estate. The attorney who had done various legal work for my parents over the years was immediately contacted by my father to help us resolve the estate.

I have done all of the administration of the estate and only used him to file the will and answer occassional questions. Now that I am ready to go to final accounting and final distributions, I asked the attourney for an accounting of his time in legal counsel and the fees he had agreed on with my father. That's when he answered

"the customary fee for legal counsel in this area is 5% on the first $100K, etc.".


Unfortunately, when I first engaged with the attourney, I did not double check for a written agreement. I live in another state and initially let my father handle a lot of the local stuff.

A while after starting, the attourney had suggested to my wife that he could dminister the estate for us as long as we sent him all the debt info. He had told her it would be the state commission normally due to the executor (x% for first $100K, etc.)
I declined the offer and have spent the last year

As far as I was concerned, I was only getting legal advice. That is all he ever gave.

As far as I know, he did absolutely no work on the settlement of the estate other than filing the will, and advising me when I sent him questions or a trial accounting.

From my research, professional fees applied when a bank or attorney was asked to take over an estate and administer it to completion. I don't even understand how someone could ethically even claim to be expecting to be paid for that. Much less make a claim when there is no explicit agreement for such service.

 

[hexeliebe]

Ethically he should not be claiming this amount. However, you have no written contract or agreement and he is correct on the statutory fees for New York.

You can either pay him his fees or refuse and end up in court.

Remember, he was your attorney during this time. It was your decision to handle all the work yourself.

 

[keh1]

but I have no agreement that says he is owed that. Isn't it true that the regulations refer to what the Executor is owed?

He did not administer the estate and it would seem he would have to prove in court that he had done so, not that he had provided legal advice. Right?

 

[keh1]

thanks for your quick reply.

 

[keh1]

The reason I didn't even think it was an issue was this explanation on the abcny website (http://www.abcny.org/executor.html), the new york city bar association.


While a testator can specify in his or her Will that the named Executors (or any successors) must waive commissions in order to be eligible to serve, this is only recommended if the person named is a beneficiary of the estate or a very close personal friend, since being an Executor is time consuming. A bank or trust company will not serve as an Executor of an estate unless it is entitled to commissions, although an attorney may agree to serve without commissions (or for reduced commissions) if his or her firm will receive legal fees for work done during the estate administration. The commission rate in New York for each Executor is 5% on the first $100,000 in the estate, 4% on the next $200,000, 3% on the next $700,000, 2-1/2 % on the next $4,000,000 and 2% on any amount above $5,000,000. Banks and Trust Companies may charge more for their services as Executors and Trustees, and particularly as money managers.

 

[Dandy Don]

Since it was YOUR mistake in not getting a written agreement in advance, you should be willing to give the benefit of the doubt (in taking advantage of his expertise to get your questions answered) to go ahead and give him what he is asking for. What does that amount add up to be?

Ask him why he didn't record your conversations with him (were they by phone or in person?) as billable time, since most lawyers keep accurate records of the time they spend on a particular probate case. In the absence of any specific agreement with you from the beginning, he wasn't incorrect in assuming he would be advising on executor duties.

 

[keh1]

yah

I guess that is true, but when I told him that I wasn't interested in his offer to administer the estate he could have also raised the issue then of his fee. At a minimum, it seems very unethical to try to bill for doing work that he didn't do. I don't think that's an assumption; that's taking advantage of a grieving client.

I thank you much for your perspective and feedback. We'll just see what happens when I talk to him about it.

 

[keh1]

update

in case anyone is interested, I have been checking around, including at the Surrogates Court about common practice in this particular county.

1. up until very recently, the most typical case has been attourney fees equal to executor commission
2. at the same time, it was also typical practice for the attorney to do a fair amount of the estate administration work that is actualy executor responsibility (e.g., getting and managing the bank account and lining everything for the executor to just sign off). That common practice is what also fed the common fee arrangement.

3. Lately, more and more have moved towards two other alternatives: hourly, and a fixed commission equal to less than the executor commission.

In terms of reasonableness, I have also talked a number of attourneys and read web sites with retainer agreements and seen this trend.

Basically, for "simple" estates they have offered the other two alternatives listed above. The reduced commission percentage I have seen (and the Chief Clerk has seen) is around 3%.

Of course, for estates that turn out more complicated than was expected, an hourly rate can end up costing much more than any particular fixed % fee.

I have been advised that in the end, as part of my fidicuary responsibility, I may have to go before the Court if there is an unsettled dispute with the attourney over the fee and the Court would weigh all of the arguments before making a final decision. Of course, if I hire external representation to argue the case with the Court, and then have to pay anything close to a full executor commission anyway, I would actually lose money, so it is in mutual best interest to reach an agreement on fairness.

I also think there is general agreement that both the Executor and any attorney worth his/her salt share a responsibility to affirm the compensation arrangements right at the beginning and to execute a retainer agreement.

 

[keh1]

resolution - benefits of communication

The resolution of all my earlier consternation was that I recently had a short but direct conversation about the fees and explained that he and I must have been operating under different assumptions and that we both should have insisted on an agreement at the start.

He recounted some things that he had done that went beyond his legal responsibilities for this estate, and I explained my understanding that the customary practice is for the attourney to get the executor fee in exchange for performing some of the executor duties (which I had declined to let him do in this case because I assumed the default fee was hourly).

We agreed that we had a disconnect and he offered a lower fee in the hopes of expediting the process.

It is not as low as I would have negotiated for, nor as high as he would have expected, but I can live with it.

In short, it was mostly a misunderstanding due to sloppy communication at a time of grieving.

As usual, a little communication without the blame game goes a long ways to eliminating bad feelings and lack of trust.

I hope this explanation of the resolution of my situation helps someone.