Posted by: Pierson W. Backes | Posted on: April 15th, 2015 | 0 Comments
One recurring challenge in my practice is that it’s difficult to advise a client about how attorneys’ fees are likely to be handled in contested probate. I’ve spoken and written on the subject, but I’m always quick to admit that it’s still not something I can address with confidence. I’d like to thank attorney Robert Morris of the Mercer County Estate Planning and Probate Committee for calling my attention to a recent unpublished trial court opinion, IMO Estate of Cohen, in which Judge De La Cruz exclusively addressed the matter of attorneys’ fees in contested probate. The discussion is a bit technical, but I write here not just for the general reader but also for my own reference and edification. Accordingly, here’s a rather long section of the opinion:
The authority to allow an award of counsel fees is found exclusively in the rule so permitting in specified circumstances. State v. Otis Elevator, 12 N.J. 1 (1953) held “[f]rom the outset in New Jersey, following English precedents, the allowance of costs and counsel fees had been uniformly considered by the courts of this State to be a matter of procedure rather than of substantive law.” Ibid, p. 5. The New Jersey Supreme Court in In re Reisdorf, 80 N.J. 319, 326 (1979) unanimously held “[e]xcept in a weak or meretricious case, courts will normally allow counsel fees to both proponent and contestant in a will dispute.” Broad statutory power is lodged in the Court of Chancery to award counsel fees. Katz v. Farber, 4 N.J. 333, 339 (1950). R. 4:42-9(a)(3) provides the authority to award fees and costs in this case type. The Rule provides in pertinent part as follows: (a) Actions in Which Fee Is Allowable. No fee for legal services shall be allowed in the taxed costs or otherwise, except (3) …If probate is granted, and it shall appear that the contestant had reasonable cause for contesting the validity of the will or codicil, the court may make an allowance to the proponent and the contestant, to be paid out of the estate… In the assessment of such a permissible award, several factors should be considered. Among factors to consider in fixing the allowance for legal services rendered the estate are: 1) the amount of the estate and the amount thereof in dispute or jeopardy as to which professional services were made necessary; 2) the nature and extent of the jeopardy or risk involved or incurred; 3) the nature, extent and difficulty of the services rendered; 4) the experience and legal knowledge required, and the skill, diligence, ability and judgment shown; 5) the time necessarily spent by the attorney in the performance of his services; 6) the results obtained; 7) the benefits or advantages resulting to the estate, and their importance; 8) any special circumstances, including the standing of the attorney for integrity and skill; and 9) the overhead expense to which the attorney has been put. See In Re Bloomer, 37 N.J. Super. 85, 94 (App. Div. 1955). In any case, the counsel fee allowed should never exceed reasonable compensation for the services rendered the estate. The standard for the calculation of a reasonable attorney’s fee award payable under a feeshifting statute or rule has been plainly laid out in Rendine v. Pantzer, 141 N.J. 292, (1995). The Rendine Court held “[u]nder the LAD and other state fee-shifting statutes, the first step in the fee-setting process is to determine the lodestar: the number of hours reasonably expended multiplied by a reasonable hourly rate.” Id. at 335. The Court also made clear that this assessment is the most significant element in the award of a reasonable fee because that function requires the trial court to evaluate carefully and critically the aggregate hours and specific hourly rates presented by counsel for the prevailing party to support the application. Id. The trial court must then determine whether the assigned hourly rates for the participating attorneys are reasonable. Id. at 337. The sensibility of this formula is highlighted in the Court’s mention that “[t]hat determination need not be unnecessarily complex or protracted, but the trial court should satisfy itself that the assigned hourly rates are fair, realistic, and accurate, or should make appropriate adjustments.” Id.
Tempering the assessment of a reasonable award is the principle that this kind of award is not designed to achieve complete indemnification. Westinghouse Elec. Corp v. Local No. 449 of Int’l Union of Elec. & Radio Mach. Workers, 23 N.J. 170, 178 (1957) (citing Clements v. Clements, 129 N.J. Eq. 350 (E. & A. 1941)), In another helpful case, the Appellate Division has held that “[t]he aim is not to make the client whole, but to fix the amount of fees and costs at an amount which is reasonable in the circumstances. See, City of Englewood v. Veith Realty Company, 50 N.J. Super. 369 (App. Div. 1958). This Court understands that the charge is to identify a sensible, reasonable award not meant to completely indemnify. With the authority presented in R. 4:42- 9(a)(3), and given the binding and sensible guidelines for this assessment, this Court makes the following findings and conclusions.
No yardstick is available for the purpose, no standard percentages or per diem rates can be recognized which would be fair to both parties in all cases, precedents indicate that each case must be judged by its own overall circumstances. The best that can be said in the way of a general standard is that reasonable compensation should be allowed.” See City of Englewood v. Veith Realty Co., Inc., 50 N.J. Super. 369, 376 (App. Div. 1958).
Posted by: Pierson W. Backes | Posted on: November 21st, 2014 | 0 Comments
New Jersey, like virtually every state, allows a spouse to take an “elective share” of their deceased spouse’s estate. The general notion, and the national model, is that you can’t cut your spouse completely out of your will.
In reality, though, New Jersey’s approach is very different from most states, and the right of a spousal share is far from a sure thing.
By statute, a spouse has a right to take an elective share against the estate, and an initial review of the statute makes the election calculation seem relatively straightforward: as a minimum inheritance, a surviving spouse in entitled to one-third of the “augmented” estate. N.J.S.A. 3B:8-1. The augmented estate means the gross estate, reduced by certain administration expenses, plus the value of property transferred by the decedent during the marriage under certain circumstances. The definition of the augmented estate is generally understood as primarily seeking to recover gifts made within 2 years of the date of death.
In application, the law providing for spousal election is so contorted that I’m inclined to say that the exceptions virtually swallow the rule. The most significant feature of New Jersey’s spousal election scheme is that, unlike similar laws in most other states, the New Jersey law is not designed to prevent disinheritance. Instead, it is designed to assure a modicum of continuing support if needed. The assets of the surviving spouse, whether vesting by virtue of the decedent’s death or independently acquired, are deducted from the elective share. If the disinherited spouse’s assets exceed one-third of the augmented estate, then the spouse is not entitled to an elective share. See, e.g., Aragon v. Estate of Snyder, 314 N.J. Super. 635 (Ch.Div. 1998); In re Estate of Cole, 200 N.J. Super. 396 (Ch.Div. 1984); In re Estate of Bilse, 329 N.J. Super. 158 (Ch.Div. 1999).
In short, it’s true that a surviving spouse is entitled to an elective share, but in effect, that share gets “paid” first from the surviving spouse’s own assets.
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