CSG Law Alert: Family Feuds Survive Decedents

The N.J. State Appellate Division just reinforced guidelines for lawyers seeking fees for work done in contested probate cases. Whether you represent the trustee, a beneficiary or challengers, if your hours are necessary and your rates are reasonable, you will be paid from the estate.

Decedent was young and had two minor children. He left one a $5,000,000 trust and disinherited the other. He also set up a residuary testamentary trust for that child and one for the benefit of his surviving family (parents, sister and the sister’s children). The mother of the disinherited child sued the estate for child support and settled the case by agreeing to a monthly support figure of $14,000, supported by the creation of a $1,000,000 trust. The settlement was opposed by Decedent’s  other child’s mother and by the beneficiaries of the residuary trust.

Fees were submitted by the trustee’s attorney, the disinherited child’s mother’s attorney, and the attorney for the favored child’s trusts and the surviving family’s trust.

The probate judge held that all parties, despite their “divergent” views, acted in the interest of preserving the favored child’s residuary estate by settling claims and avoiding protracted litigation, and that therefore all counsel were entitled to have reasonable fees paid from the estate. (Because the trial judge issued a conclusory finding that all attorneys billed a reasonable number of hours at a reasonable rate, the Appellate Division remanded the case for more specific findings on the entries).

Takeaway? Adversarial litigation intended to or resulting in protection of an estate will support a fee application from the estate.

In the Matter of the Estate of Keith R. O’Malley, Docket Nos. A-4084-17T1 and A-1276-18T1 (Decided March 10, 2020).

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