Chapter 34 - § 34.35 • FEES OF ATTORNEY

• Jurisdiction: Colorado

§ 34.35 • FEES OF ATTORNEY

The matter of agreeing with the representative on the basis of the fee should have been taken care of at the commencement of the representation. The amount of the attorney fee remaining to be paid should be given attention at this time. If the administration has extended over a period of more than one taxable year of the estate, payments on account may have been made for the purpose of providing federal income tax deductions against the income of the estate. The final installment must be paid before final settlement to get an income tax deduction, and if it is to be an estate tax deduction, it should be paid before final settlement to comply with the affidavit of the representative on file with the Internal Revenue Service. If the statute of limitations has not run on the tax, it should be possible to obtain a refund respecting fees paid after final settlement.

The fact that an attorney has filed a suit to impress a lien on the residuary estate devised to trustees does not require postponement of the final settlement of the estate if the trust is solvent and distribution to the trustees will not prejudice the claimant.¹⁰⁵

The philosophy of the Colorado Probate Code is that once beneficiaries are advised of their responsibilities to protect their own interests and advised of the limited role of the court, the court will normally inquire into the reasonableness of fees only upon beneficiary requests. C.R.P.P. 33 provides that the court shall not inquire into fees absent objection by an interested person; and also that the court may review "such matters" as it determines necessary on a case-by-case basis for good cause shown. In Estate of Santarelli and Estate of Hockinson (cases combined),¹⁰⁶ the court on its own motion reviewed and reduced personal representative and attorney fees. The court noted the comments to the Uniform Probate Code and the provisions of C.R.P.P. 33 but noted that C.R.P.P. 33 has an exception for "unusual circumstances." Here the court found, in what may be a bootstrap argument, that the cases involved an unusual circumstance, which was that the fees, on their face, did not comply with the statutory criteria in C.R.S. § 15-12-721. In one case, the parties, in order to avoid federal estate tax exposure, agreed to generous fees. In the Hockinson case, the estate had already been closed by verified closing statement.

The court may take into consideration any dereliction of duty by the attorney in fixing his or...