Executrix Commission Reduced To Be In Accordance With Court Approved Fee Schedule Absent Extraordinary Time And/Or Effort
In the estate administration and estate litigation case of In Re Estate of Haffner, PICS No. 15-0515, (C.P. Monroe. Jan. 16, 2015) concerning the executrix’s motion to approve the account, the Honorable David J. Williamson reduced the amount of her commission in accordance with the court approved fee schedule, declined to create a charitable trust and instead directed a distribution to the charities initially agreed to by the co-trustees.
Miriam Haffner died in December 2012. She was survived by her husband and five children: Karen Anthony, Max J. Haffner, Deanna Lyles, David Haffner and Jeannie Jennings. She had a February 2012 will and a December 2012 codicil in which she left half of her mesothelioma litigation proceeds to a charitable trust and the remaining half to her residuary estate. Karen and Jeannie were appointed co-trustees of any charitable trust.
Karen, as executrix, filed an accounting for the estate and sought approval and an order regarding the charitable bequest. Various objections were raised.
The first objection was to the $61,282.72 commission claimed by Karen, which was 6 percent of the estate’s gross value. The court noted that the appropriateness of personal representative fees was analyzed in In re Estate of O’Levich. A person seeking compensation for services as a fiduciary must established facts demonstrating that she is entitled to such compensation and the compensation must be reasonable.
Further, Johnson Estate set forth a fee schedule for a personal representative. It provided for a percentage-based fee that eliminated having to calculate an hourly rate, specific number of hours, or subjectively compare the value of one person’s time as opposed to another.
The court said the fee schedule was fair and reasonable in most cases. To justify higher fees, there had to be specific evidence showing that the administration of the estate was extraordinary. To justify lower fees, an extraordinary lack of time or effort had to be shown.
The court found that although Karen had spent a lot of time and there were several issues, including the charitable trust provision and litigation with beneficiaries, none of those matters rose to extraordinary circumstances warranting a fee in excess of the fee schedule. Nor was there an extraordinary lack of time or effort warranting a fee less than the schedule amount, or dilatory or bad-faith action by the executrix. Therefore, the court applied the fee schedule and awarded a $29,987.21 commission.
As to the objection to attorney fees, the court found no evidence that any of the fees billed to the estate were for non-estate related matters and approved the amount requested.
Regarding the charitable trust, the court noted that decedent had not expressly indicated what cause should receive the donation or how to distribute funds. The court found that creating a charitable trust to distribute the monies would not achieve decedent’s true interests and would not be the most efficient and economical means of distribution. Rather, the best result to honor decedent’s intentions would be an outright donation. Also, it found that the decedent would have wanted the trustees, not the court, to select the recipients. Holding that their initial agreement regarding the charities was the best solution, the court directed distribution to the originally identified charities.
Regarding payment of inheritance taxes, the court enforced the provision of the will providing for payment from the estate of those taxes on probate, not-probate and joint property.
Finally, the court rejected the request that the Kunkletown house be deeded in all five of the children’s names, finding that to do so would result in additional cost and would be problematical when selling the house and thus would not be in the best interests of the estate and the beneficiaries.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 38 PLW 330 (April 7, 2015)
Filed Under: Estate Administration; Executor Commission; Estate Litigation; Charitable Trusts
Please visit our Probate & Estates Administration, Estate and Trust Litigation & Estate and Trust Blogs websites for more information on this topic. For more questions and concerns on this case, we have the experienced lawyers at Pozzuolo Rodden, P.C. Law Firm.