SRBC's Jeff Stern and Alisa Hacker recently won a victory for the beneficiaries of an estate seeking to defeat a substantial claim for attorneys' fees.

A man in his 80s died while a resident in a nursing home. His second wife was the executrix of a modest estate. The will provided that the estate "poured over" into a previously funded trust of which the sole beneficiaries were the decedent's two children by his first wife.

The executrix's attorney petitioned for probate and prepared a Massachusetts estate tax return, which reflected a tax due of just under $33,000.

An attorney for the decedent's children realized that the tax was paid erroneously, as a closely held stock in the estate should have been discounted for minority interest, and the executrix's lawyer failed to use the alternative valuation date for other securities, which had declined in value in the six months since the man's death.

As a result of the errors, the children lost confidence in the ability of the executrix's attorney; a second lawyer was engaged to prepare a proposed first and final account. The account was presented to the children for assent. Lawyer No. 2 offered that the executrix would waive a fee if the children assented to the proposed first account, insisting on a release and indemnification of lawyer No. 1.

The children were reluctant to sign, believing they had incomplete information; in particular, there was a refusal to release financial information about the trust, inextricably connected to the estate.

At that point, the objectors engaged the undersigned, who prepared a number of objections to the account, including the assertion that attorneys' fees paid to both executrix's lawyers were excessive and duplicative.

Subsequently, the executrix hired a third attorney, who filed an equity action in Probate & Family Court, as well as a similar action in the Superior Court, seeking the return of the closely held stock, which had been distributed, back to the estate. Under the terms of the will and trust, that stock went outright to the children, rendering the previous distribution inappropriate. Lawyer No. 3 alleged that estate assets had been depleted, and he needed the return of the property in order to pay accrued attorneys' fees, as well as the ongoing legal fees.

Recognizing that a full-scale trial would create significant additional expense, the children's attorney and lawyer No. 3 agreed to allow the judge who had heard preliminary motions to decide all issues raised in both courts.

By stipulation, the judge's decision was to be "final and binding on all parties, with all rights of appeal waived." Moreover, as an additional effort to control costs, the parties agreed that the case was to be decided on affidavits, memoranda of law and oral argument, without an evidentiary hearing. Affidavits were submitted by the executrix, her lawyers and the children.

The judge's opinion and judgment determined that just over $36,000 paid to the three executrix's attorneys should be repaid to the estate; moreover, he rejected the claim that the previously distributed stock was required to be re-transferred to the estate and found that the claims filed in Superior Court and in equity in the Probate Court seeking re-transfer were "unnecessary and frivolous."

The judge rejected the claim for additional claimed attorneys' fees of nearly $50,000 to lawyers No. 1, 2 and 3 and estimated future fees of $30,000 by lawyer No. 3. Thus, the decision was equivalent to a ruling in favor of the children for approximately $116,000.

The judge expressed concern over an effort by lawyer No. 1 to shift the blame for the mistaken payment of estate taxes by inaccurately claiming that the son of the decedent was responsible for the incorrect appraisal.

The judge also was troubled by the lengthy delay in the administration of what should have been a fairly simple estate and the claim that funds needed to be retained for contingent claims, long after there was any likelihood of such a claim.

The judge also found that "the stance of [lawyer  No. 2] was, at all times, adversarial and contentious. The court received no evidence that either [lawyer No. 2] or [lawyer No. 1] were willing to admit and take responsibility for clear errors made, and to account to the Estate and the Objectors for such losses."

The decision marked a postscript to the recent Supreme Judicial Court decision In the Matter of the Estate of King, 455 Mass. 796 (2010), and a reminder of the wide discretion that is vested in the Probate & Family Court to determine the reasonableness of counsel fees, particularly whether there appears to be duplication of effort or other questionable conduct.