A Strong Offense
A Stronger Defense
Estate beneficiaries’ happiness is inversely proportional to the amount of money spent by an administrator for professional help. That’s why we see a lot of disputes not over the hiring of a professional, but over the appropriateness of the total amount paid to a professional hired to help settle an estate, such as an attorney or accountant.
In Murphy v. Prescott (unpublished), the Appeals Court of Massachusetts weighed in on a group of heirs’ claims that certain fees paid to the administrator, an attorney, and an accountant in connection with settling an estate were unreasonable. The appellate court also gave some helpful advice to attorneys about those pesky time sheets.
Robert E. Bourassa died without a valid will, so his friend, James T. Murphy, was appointed administrator of his estate. The estate exceeded $3 million and was comprised of (over 400) stocks and bonds, retirement accounts, savings accounts, and checking accounts. Marshaling the estate assets was particularly difficult because Bourassa did not keep any records of his assets and his apartment was in deplorable condition. Identifying Bourassa’s heirs was also difficult because his immediate family predeceased him. Nevertheless, thirty-three heirs were located.
Murphy hired an accountant and an attorney to assist with settling the estate. The attorney billed at $350/hr and was ultimately paid $86,000. The accountant was paid $10,500; and Murphy took a fee of $20,000. The heirs contended that the fees paid were unreasonable, but the probate court judge concluded that the fees were reasonable given the relative complexity of the estate, the number of heirs, and the absence of record keeping by Bourassa.
What’s most interesting is the challenge to the attorney’s fees. The heirs apparently didn’t contend that it was inappropriate to hire a lawyer, but that the lawyer failed to maintain contemporaneous time records. The appellate court stated that “it would not have been unreasonable to impose a reduction in the fee where the attorney failed to keep such records,” but such a reduction “was not required.” The attorney testified as to the extensive work he did in connection with settling the estate and the judge was entitled to credit his testimony.
Keeping contemporaneous time records can be a pain, but they can end up being a great deal of help down the road.