Reproduced with permission of Trusts & Estates magazine (January 2007).
Some wags who practice in the Probate Division here in Chicago say an estate is only "fully probated" when it has been fully eaten up by lawyers' fees in litigation or other legal matters. For the literary, such quips bring to mind Jarndyce v. Jarndyce in Charles Dickens' novel, Bleak House, lampooning the 19th century English chancery courts.
But before we snicker about the British courts of old or present-day Chicago cynics, take a look at the case of a Washington, D.C. attorney who acted as the personal representative of a decedent's estate and tried to collect more fees than the court was willing to approve. The lawyer was heavy handed in trying to get paid what he thought his services were worth. Yet the case stands as a warning that all estate lawyers need to heed what the probate courts say they can charge.
On March 3, 1993, Leroy Green died intestate in the District of Columbia. His estate consisted of liquid assets worth about $46,000 plus a home on Ames Street, N.E. On July 20, 1994, attorney John Pye was appointed as successor personal representative of Green's estate.
Attorney Pye asked the court for $44,000 in fees and $1,000 in expenses for a year and a half's worth of probate work. Five of the decedent's 17 heirs filed an objection to this request.
On Aug. 5, 1998, the probate court approved only $28,041.84 of the $44,000 requested fee, and disallowed the request for expenses because of Pye's "extraordinary failure" to justify and document either.
The court also ordered Pye to file receipts from all heirs to establish that their complete and accurate final distributions were received.
About a month later, Pye filed a "Motion for Application for Entry of Judgment, for Stay of Enforcement of Order Pending Appeal." In its order granting the motion, the court directed that the filing of distribution receipts be stayed pending appeal. That winter, Pye wrote a letter to the decedent's heirs asking if they'd pay the difference between his requested and approved fees. And here's where he went too far: Pye also strongly implied that ó because of the stay that had been granted by the probate court (at his request) ó the heirs would not receive any portion of their share for at least a year if they didn't settle with him, regardless of the outcome on appeal. Pye also stated that none of the heirs was "receiving a substantial distribution," and that his additional...