Both Attorney’s fees and Executor’s commissions were reduced in Janiga Estate (O.C. Div. Phila.) 28 Fiduc. Rep. 2d 219, opinion by Judge Herron.

Decedent left an estate valued at $1,024,425.21 and a  will that devised two parcels of real estate to the Executrix, made some specific bequests, and divided the residue between two charities.

The Attorney General of the Commonwealth of Pennsylvania, as parens patriae, filed ten objections to the account and a hearing was scheduled. At that hearing, the Attorney General stated that various objections had been resolved, except for the objections that the executrix commission of $34,000, the attorney fee of $45,000( the Account incorrectly listed attorney fees as $40,000, but during the hearing it was disclosed that attorney fees had actually totaled $45,000) and the accountant fee of $31,000 were  unreasonable and excessive based on the nature of this estate.

(Here is the math:  That’s a total of $110,000 in fees –  a whopping 10.73% in an estate whose assets apparently consisted of a house, tangible personal property and bonds.)

The Attorney General claimed that the bulk of estate administration was completed by October 2004 (which consisted of the Executrix distributing property to herself and family members)  but due to the neglect of the executrix and estate counsel, distribution was not made to the charities until 2006.

The AG also asserted the the executrix failed to monitor the legal and accounting fees billed to the estate.

The court said:  "While a schedule for computing fiduciary and attorney fees was set forth in Johnson Estate, 4 Fid. Rep. 2d 6 (Mont. City. 1983) based on percentages related to the size and nature of estate assets, the Pennsylvania Superior Court has more recently emphasized that “[e]gregious error is committed when a court awards commissions and fees simply on a percentage basis without inquiry into the reasonableness of the compensation.” In re Preston, 385 Pa. Super. 48, 57, 560 A.2d 160, 165 (1985). A methodology for determining attorney fees has been set forth by the Pennsylvania Supreme Court in LaRocca Estate, 431 Pa. 541, 546, 246 A.2d 337, 339 1968).

Held:  "On this record, therefore, the payment of $45,000 in attorney fees was unreasonable. It will
therefore be reduced by half to $22,500. The executrix will therefore be surcharged in the amount
of $22,500 for that excessive payment and her claimed commission of $34,000 will likewise be
reduced by half to $ 17,000. Consequently, the surcharge that she must return to the estate is
$39,500. A crucial factual consideration in reducing these fees and surcharging the executrix is that the beneficiaries whose interests were neglected were charities. . . ."

Thank you to the July 2008 edition of Fiduciary Review which reported on the Janiga Estate.  Fiduciary Review is edited by J. Brooke Aker, Richard L. Grossman, James L. Hollinger and Frances A. Thomson, 60 East Penn Street, Norristown PA 19404