Snell's Estate, In re

• Decision Date: 20 March 1962
• Citation: 231 N.Y.S.2d 257,33 Misc.2d 1044
• Parties: In the Matter of the ESTATE of Bertrand H. SNELL, Deceased. Surrogate's Court, St. Lawrence County
• Court: New York Surrogate Court

Page 257

231 N.Y.S.2d 257

33 Misc.2d 1044

In the Matter of the ESTATE of Bertrand H. SNELL, Deceased.

Surrogate's Court, St. Lawrence County.

March 20, 1962.

John T. DeGraff, of DeGraff, Foy, Conway & Holt-Harris, Albany, for petitioners.

Crapser & Kirsch, Massena, petitioners and attys., for John W. Winthrop, Exr.

Vaughan & Lyons, New York City, petitioners and attys., for William E. Petersen, Exr.

Harry A. Leigh, of Turk, Marsh, Ouchterloney & Kelly, New York City, for Marshall W. Pask, as trustee, inter vivos trust.

John W. Winthrop, Potsdam, Co-Exr., in pro. per.

LOTT H. WELLS, Surrogate.

This is a proceeding under Section 231-a of the Surrogate's Court Act to fix and determine the reasonable compensation of the petitioners, as attorneys, the firm of Crapser and Kirsch, Central Building, Massena, New York, and the firm of Vaughan and Lyons, 70 Pine Street, New York 5, New York, for legal services rendered the estate of Bertrand H. Snell. Mr. Crapser was admitted to practice in the State of New York in September 1937; Mr. Kirsch in October 1952; Mr. Vaughan in January 1928; Mr. Lyons in December 1927.

Bertrand H. Snell, a resident of the town of Potsdam, died on February 2, 1958, leaving a Will dated July 23, 1956, and a codicil dated November 22, 1957. His distributees are his widow, Sara M. Snell, and two daughters, Helen Snell Cheel and Sara Snell Petersen. William E. Petersen and John W. Winthrop were named as executors. The Will and codicil were duly admitted to probate February 6, 1958, and Letters Testamentary issued to the executors.

Decedent bequeathed his tangible personal property to Mrs. Snell and in addition made bequests outright or in trust to or for the benefit of individuals and charities in total amount of $1,059,006.00 including a bequest of $600,000.00 to Mrs. Snell and bequests of $100,000.00 to each of his two daughters. The bequests also included eight separate charitable gifts in total amount of $166,006.00 and thirteen general legacies to individuals aggregating $93,000.00. The residuary estate was placed in trust to pay the income therefrom to Mrs. Snell during her lifetime with provision for payment of the principal upon her death to the trustees of two inter vivos trusts, both of which were established in the year 1952, one for the benefit of Mrs. Cheel and remaindermen, the other for the benefit of Mrs. Petersen and remaindermen.

The firm of Crapser and Kirsch was retained by the executors upon the death of Mr. Snell. The firm of Vaughan and Lyons was retained in June 1958. Both firms rendered legal services in the estate administration to the date of the petition herein. 'Said services comprise generally of the preparation of the necessary papers for the admission to probate of the Will and codicil thereto of the decedent and the issuance of letters testamentary thereon; preparation of legal documents required for the transfer of securities and other assets to the executors; advice as to the payment of general legacies in kind and the income tax consequences thereof; preparation of Federal and New York State estate tax returns and research and advice on Canadian Succession Duty taxes; research and advice on various income tax problems; research and advice regarding the disposition of the estate's interest in Chazy Orchards, a partnership in which the decedent had a half interest; research and advice on the disposition of the bonds of Black River Regulating District, preparation of the intermediate account of the executors up to May 31, 1960, and of other papers involved in the entry of a decree settling such intermediate account'. (Petition, 231-a)

On the hearing the testimony as to the services were described with reference to the following categories.

                                                          Parts of Days
                                                         Crapser & Kirsch  Vaughan & Lyons
                                                         ----------------  ---------------
                Probate and related matters                     12
                General legacies                                39                22
                Federal and New York State Estate Taxes         89                89
                Canadian Succession Taxes                       35                11
                Income tax matters                               6                27
                Chazy Orchards                                  33                66
                Bonds of the Black River Reg. Dist.             29                14
                Accounting                                      33                22
                Miscellaneous                                  100                10
                                                         ----------------  ---------------
                                      Total                    376               261
                

The petitioners are of the opinion that the reasonable value of the legal services rendered by them up to the date of the petition is the sum of $150,000.00. They are asking for an order fixing the sum which this estate shall pay them of $100,500.00 in addition to the $49,500.00 which the executors have already paid them.

The intermediate account of the executors sets forth the gross estate at $6,879,249.78. It reports capital gains during the period of the account at $498,858.48 and reports income received during the period of the account at $416,109.31. The assets included four separate issues of U. S. Treasury Bonds, $235,944.02; eighty-three issues of municipal bonds, $1,620,617.49; two issues of corporate bonds, $21,180.49; sixty-three separate issues of common stocks, $4,332,763.69; three issues of preferred stocks, $65,828.75; cash, $245,323.66; insurance to estate, $55,940.23; partnership interest, apple orchard, $234,901.15; real estate, $62,500.00; miscellaneous, $4,250.40.

'At the time of his death, the decedent was the owner of $130,000 Black River Regulating District 3% bonds due September 1, 1951 which he had held for many years. The Black River Regulating District was organized in 1919 pursuant to the provisions of Article VII-A of the Conservation Law enacted by Chapter 662 of the Laws of 1915. The purpose of the Act was to provide for regulation of rivers by storage reservoirs--various attempts were made over the years to have the State of New York assume responsibility for the principal amount of the bonds through enactment of legislation.--The last such attempt during the lifetime of the decedent failed a year or so before his death. At the time of the death of the decedent and in view of the prior history of the bonds there appeared to be no reasonable prospect that the principal of the bonds would ever be paid. Accordingly the bonds were reported in the estate tax returns as having no value'. (Account, Schedule J)

The New York State Bar Association, March 1, 1958 compilation of minimum fee schedules adopted by local bar associations within the State of New York, 'compiled for information of the Bar only and not to be deemed an endorsement by the New York State Bar Association of the principle of minimum fee schedules or approval of the amount of any fee listed herein', indicates that all such fee schedules are on a percentage of amount of estate as basis and in approximately 80% of counties the recommended minimum compensation to attorneys exceeds a single commission. For St. Lawrence County the schedule indicates that the minimum fee of an attorney should equal two commissions on gross estate. This was not substantiated. It is believed the schedule prior to 1953 recommended 1 1/2 times a single commission. (Petr. Ex. #1)

The instructions issued by the State of New York, Department of Taxation and Finance, relating to motions to fix estate taxes in the counties of Kings, Queens, Nassau and Suffolk, 'and approved by the Surrogates', indicate that the allowable compensation to attorneys is in excess of a single commission. '8. Attorneys fees paid or to be paid must be set forth and should be limited to a reasonable amount. Ordinarily such fees in order to be deductible on motion should not be more than 5% on the first $5,000 of the gross estate, 4% on the next $10,000, and 3% on the balance. Where attorney's fees exceeding such amounts are claimed for any reason, the proceeding will be referred to the appraiser'. (Petr. Ex. #4)

Petitioners produced two expert witnesses. The first expressed his opinion as to the value of petitioners' services at $185,000, the second at $175,000. The first witness was admitted to rpactice in New York State in October, 1914, and is a former president and chairman of the Board of the Northern New York Trust Company. The second, from California, was admitted to practice in Illinois, 1911, in Iowa, after World War I, in California, 1931. He made a national survey, 'Attorneys' fees on Probate', (Petr. Ex. #5), which was published in the August 1960 issue of 'Trusts and Estates', by Fiduciary Publishers, Inc., New York, N. Y. This article reports that in the great majority of jurisdictions in the country, the attorney's fee is determined by applying a system of percentages to the value of the estate accounted for, with additional compensation for extraordinary services. The estate accounted for usually covers all assets coming into the hands of the executor or administrator. A few states exclude real property which is not sold during probate. There is also a small group that apply the percentage to joint tenancy property and to insurance proceeds. Seven states have statutes fixing the attorneys' fees: Arkansas, California, Idaho, Iowa, Missouri, New Mexico and Wyoming. An eighth state, Arizona by statute fixes the fiduciary's fees and the courts uniformly allow the same fees to the attorney. Few of the statutes are alike in the percentages or the brackets to which the percentages apply. For estate value of $1,000,000 the statutory state fees are, Arizona, $40,480; Arkansas, $29,050; California, $13,500; Idaho, $30,170; Iowa, $20,120; Missouri, $29,050; New Mexico, $50,150; Wyoming, $20,350. In eleven states, Georgia,...