Citation. In re Estate of Warhol, 165 Misc. 2d 726, 629 N.Y.S.2d 621, 1995)
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Brief Fact Summary.
Petitioners, the attorneys of Warhol’s estate (Petitioners), filed an application with the New York courts to fix the lawyer’s fees for Respondent Estate Executor (Respondent), in the administration of the estate of the Warhol estate, which was valued at more than $100,000,000.
Synopsis of Rule of Law.
With respect to the administration of an estate, what constitutes reasonable compensation for the estate’s attorney requires consideration of the nature of the services rendered, the size of the estate, the responsibility undertaken, the difficulty of the legal issues, the ability of the attorney, and the amount of time spent.
Facts.
Warhol was a famous artist who died unexpectedly. Warhol left behind an estate valued at more than $100,000,000. His executor had been Warhol’s close advisor and business partner for over twenty-five years. The executor, on the day of Warhol’s death, hired an attorney who was unexperienced in estates and trusts management but who had attained a high level of popularity as the model for a character in the best-selling novel, “Bonfire of the Vanities.” Respondent Executor and Petitioner Attorney had entered into a retainer agreement. Under this agreement, Petitioner was to provide Respondent with legal services in connection with the administration of the Warhol Estate. The parties had changed the retainer agreement on two occasions. Finally, the agreement was amended to fix Petitioner’s fees at an increased amount, which was equal to an executor’s commission. Petitioner sough to have the fees fixed and filed with the court. The court fixed the fees at $7.2 million dollars.
Issue.
With respect to the administration of an estate, does what constitutes reasonable compensation for the estate’s attorney require consideration of the nature of the services rendered, the size of the estate, the responsibility undertaken, the difficulty of the legal issues, the ability of the attorney, and the amount of time spent?
Held.
Yes. With respect to the administration of an estate, what constitutes reasonable compensation for the estate’s attorney requires consideration of the nature of the services rendered, the size of the estate, the responsibility undertaken, the difficulty of the legal issues, the ability of the attorney, and the amount of time spent. The retainer agreement is unenforceable because it does not set a ceiling limit on the amount that can be awarded Petitioner. $7.2 million dollars is a reasonable amount given the value of the Warhol Estate. This value is based upon the nature of the services rendered, the size of the estate, the responsibility undertaken by Petitioner in managing the estate, the difficulty of the legal issues involved in the estate, the ability of the attorney, and the time spent by Petitioner on the estate matters.
Discussion.
Fees are payable to attorneys and executors who handle estates. Normally these fees are separated when determined and paid. Various factors are considered in awarding the fees, and the reasonableness of the fees is analyzed by a court in accord with those factors. Also, see Matter of Warhol for the initial review of the attorney’s fees.
