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attorneyappealhearingburden of proofprobatewillobjection
attorneyappealtestimonyprobatewillexpert witness

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Matter of Estate of Krueger, 176 Mich.App. 241, 438 N.W.2d 898

Facts

William T. Krueger died leaving an estate valued at approximately $500,000. Herbert Ramage was named the executor and personal representative, hiring the law firm of Sempliner, Thomas, Tiplady and Boak to assist in the estate administration. After two accountings were approved without objection, the beneficiary, Gary Binder, objected to the third accounting, claiming the fees were excessive. A hearing was held where the court requested an itemized statement of services, which was not adequately provided, leading to disputes over the reasonableness of the fees.

William T. Krueger died on October 5, 1982, leaving an estate valued at approximately $500,000 after payment of taxes and debts. A copy of Krueger's will, the original of which had been lost, was admitted to probate on December 6, 1982. Herbert Ramage was named the executor and also acted as the personal representative.

Issue

Did the probate court abuse its discretion in increasing the attorney and personal representative fees and in assessing additional fees against the beneficiary's share of the estate?

The Court of Appeals, Murphy, J., held that: (1) order of probate court, increasing fees awarded to attorneys for estate beyond those justified by itemized statements submitted by attorneys and expert testimony presented in case, constituted abuse of discretion; (2) order increasing fees awarded to personal representative was likewise abuse of discretion; and (3) probate court should not have assessed professional and expert witness fees against beneficiary's share of estate, inasmuch as beneficiary had reasonably objected to lack of specificity in the applicants' description of services.

Rule

The court has broad discretion in determining reasonable compensation for attorneys and personal representatives, but this discretion is limited by the requirement to consider factors such as time spent, complexity of the estate, and the necessity of services rendered.

An attorney is entitled to receive reasonable compensation for necessary legal services he performs on behalf of the estate, in an amount approved by the court. M.C.L. § 700.541; M.S.A. § 27.5541; MCR 8.303.

Analysis

The appellate court determined that the probate court's increases in fees were not supported by the evidence presented. The court noted that the attorneys did not provide sufficient justification for the increased fees and that the beneficiary's objections were reasonable. The probate court's findings indicated a misunderstanding of the burden of proof regarding the reasonableness of the fees, leading to an abuse of discretion.

The evidence the estate's attorneys presented in support of the requested compensation consisted of the following: (1) the third and final accounting, (2) an estimated itemized statement reflecting approximately two hundred billable hours, and (3) expert testimony that some of the legal services performed were extraordinary, that they were handled competently, and that the $29,538.50 fee requested was reasonable compensation for the legal services rendered.

Conclusion

The Court of Appeals reversed the probate court's award of increased fees and ordered that the original requested fees be reinstated, concluding that the beneficiary should not have been penalized for raising reasonable objections.

Reversed in part and affirmed in part as modified.

Who won?

Gary Binder, the beneficiary, prevailed because the appellate court found that the probate court had abused its discretion in awarding excessive fees and penalizing him for his objections.

The party who originally objected to the attorney and personal representative fees charged to the Krueger estate was Anthony Gerhardt.

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