Estate of Rolfe

Brief Fact Summary. Daughters (Beneficiaries) of Decedent Richard S. Rolfe (Decedent) appeal a probate court decree awarding total executor’s and attorney’s fees in the amount of $26,000.

Synopsis of Rule of Law. The amount of attorney’s and executor’s fees to be paid on an estate is dependable on a variety of factors, including the actual amount of time expended for work on the estate.

Facts. Decedent left the bulk of his estate to his surviving spouse and three daughters. The total estate, including probate and non-probate amounts, was valued at over one million dollars. First Capitol Bank was named as sole executor of the estate. The bank named Richards Edmunds as the trust officer. Decedent’s attorney, Frederic K. Upton, was hired by the executor to render services for the estate. Decedent’s financial affairs were in perfect order on his death and there were no complex issues that had to be handled by either the bank or his attorney. Aware of the potentially high cost of closing an estate, Beneficiaries sought an estimate of these costs soon after Decedent’s death. Rather than being given an estimate, Beneficiaries were provided with a schedule of fees. The Beneficiaries then determined that the fees could be in excess of $30,000. Having determined this, Beneficiaries sought detailed information as to the attorney’s and executor’s fees. No information was obtain
ed. Beneficiaries were then informed by the executor that it was too premature to set the fees because the amount of work that would be involved was indeterminable. Finally, when pressed by the Beneficiaries, the executor agreed that the fees could be set based upon the work done rather than by the court. Although the Beneficiaries had been sent a letter stating that due to the friendly relationship between the attorney and Decedent, the fees would be kept as minimal as possible, the executor sought the highest fees allowable. The executor and the attorney subsequently agreed to reduce their fees, but the amount was still higher than the Beneficiaries thought reasonable. The daughters challenged the fees in probate court. The probate court determined that based on the value of the estate, the complexities and risks involved in managing the estate, the executor’s and attorney’s expert qualifications, and the amount of work done on the estate, an amount of $26,000 was to be awarded in f
ees. Daughters challenge this contention.

Issue. Is the amount of attorney’s and executor’s fees to be paid on an estate is dependable on a variety of factors, including the actual amount of time expended for work on the estate?

Held. Yes. Beneficiaries argue that the primary focus in determining reasonable compensation for the executor and attorney should be the actual hours expended. The attorney and the executor, on the other hand, contend that undue consideration of time records would lead to unjust results for the more experienced and efficient worler; thus a variety of factors should be considered. The fee schedules employed to determine attorney’s and executor’s fees are problematic because they serve, in effect, as not the maximum fees allowed but instead the average fees (because fiduciaries are included toward seeking the maximum amount allowed in fees). Since the fee schedules are not an appropriate measure, we must instead determine the fee-setting standard to be employed. The fees will be determined separately for the attorney and the executor because the standards for each are different. The executor’s fees should be based on the size and the estate, the actual time involved in working on the e
state, and the responsibilities and risks involved in the estate. Attorney’s fees are based on a reasonable standard and include consideration of the following (although this is not an inclusive list): The time and labor required, novelty and difficulty of the questions involved, skills requisite to the work performed, likelihood of other work being precluded as a result of accepting this work, customary fees charged, amount involved and results obtained, time limitations involved, nature and length of professional relationship, experience, reputation, and ability of attorney, and whether the fees are fixed or contingent. Therefore, we reverse and remand with these standards to be considered on review.

Discussion. The standards employed to determine the fee amount to be awarded to the executor and the attorney are those generally employed to determine reasonable fee amounts and, as in this case, are based on a variety of different factors.