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Thomas McJD
Thomas McJD, Attorney
Category: Estate Law
Satisfied Customers: 3170
Experience:  Wills, Trusts, Probate & other Estate Matters
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My parents had an attorney draw up a Living Trust

Customer Question

My parents had an attorney draw up a Living Trust for them in 2002. I should state they live in Iowa. The trust was updated, with a few changes, in 2013. My mother passed away on Feb. 25, 2015 and I drove home from Indiana to console my 95 year old father. I was a trustee along with dad on the trust account. My father instruct me to call his Trust Attorney, D.D. and set up a time to meet with him.
My parents were married 65 years and were very close. The hospice physician stated the most likely scenario would be dad would pass within a month's time. I attended the meeting alone. D.D. asked me what I thought my mother's estate was worth and I said around $2 million. He spoke about trusts and how we would avoid probate. Also, since they didn't have any out-of-state real estate, ownerships in companies, or liens, etc, it would be a fairly easy trust to administer. D.D. then slide a fee agreement across the table to me, and wrote 1-1/2% flat fee or $30,546.71. He told me to sign my name and sign dad's name (then initial it) without suggesting I take it back to dad for his approval.
Upon further investigation, I could NOT find one attorney that would charge that. All said it was excessive. All that D.D. said he had to do was file the IRS 706 form and, on his recommendation, draw up sub trusts- A. for dad and B. for a survivior's trust.
My father is very upset. What is involved in drawing up a sub trust and was it necessary? Is $30,546.71 an excessive fee for doing those two things?
Submitted: 1 year ago.
Category: Estate Law
Expert:  originallawyer replied 1 year ago.
That sounds very high. I've heard of trustees getting 1% of the trust for managing the trust, but I have not heard of an attorney gaining that much in a fee.Further, do you have Power Of Attorney for your father? If not, then you technically could not sign his name and the agreement should be invalidated.Regardless, I would send said attorney a letter, certified mail/return receipt requested alerting him that your father has elected to not retain him (if that's his choice). I would also contact the State Bar of Iowa. They may be able to help settle any potential fee disputes.
Customer: replied 1 year ago.
Yes, I do have Power of Attorney. But I feel I was taken advantage of, due to the loss of my mother. I recently negotiated with D.D. after my father said, "Why the hell is he charging me like that?" and threatened to turn him in to the local bar association for excessive billing. He didn't want that!! Since I had already paid him the half he request that first day, $15,000, D.D. said he now wouldn't charge me the other $15,000 plus. But he wanted $ for copies, filing, and postage. The more I researched and read, the more disillusioned and distrustful I became. My father wanted an itemized bill but he says that he does not bill that way.
He goes on to say he has a minimum fee of $4500 and to do the Federal 706 Tax Return he charges $3500. Does this seem within a fair range?
Expert:  originallawyer replied 1 year ago.
The American Bar Association frowns upon attorneys setting standard prices for certain services across the board, so in theory, attorneys can charge whatever they want. However, yes, that still sounds excessive. I'd question what the first $15000 went for. That should cover all the things he is doing for you. I'd say to go ahead and being proceedings against him with the local bar association. $15000 still sounds excessive to me, and certainly anything above that should not be necessary. Your father does have the right to have an itemized bill, especially if the lawyer is charging for copies, postage, filing etc.
Customer: replied 1 year ago.
Here is the letter he emailed to me today. He seems a tad bit of an ass . . . Sorry
Expert:  originallawyer replied 1 year ago.
Having read the letter, I have a better feel for the situation. As I understand it, he's refunded the $15000, and is letting you choose your own price. I feel like that's probably the best solution you could get if you stayed with him as an attorney. I agree that he sounds aggravated. It seems like there was just a lot of miscommunication or lack of communication from him on how he chose to set his fees. Just because Iowa law allows for a 1% payment, doesn't mean he has to. As attorneys, we can often be guilty just expecting our clients to understand our fee structure. Going forward, I do not think his $4500 fee for just trust administration is overly excessive. It may be on the high end, but not outside the bounds of possibility, as long as it's just the $4500, not $4500 on top of $15000.
Customer: replied 1 year ago.
The letter went out today at 5 pm. Duffy does not work on Fridays and the letter/check has not arrived. In my mind, I think he wants $4500 plus $3500, for a total of $8000. If I offer him $4500, and he rejects it, is everything he has done null and void? Or do I have to hire another attorney just to file the 706 tax return? I really do not want to use him ever again, once dad passes.
(FYI: My father indicated to me, he would have never okayed a 1-1/2 flat fee. Furthermore, Mr. Duffy twisted some of the facts and made simply statements that were not accurate.) Duffy came over to the house, on his way home, to have dad resign as a trustee. Mr. Duffy knew my father was a former CPA/Senior VP of Finance for a manufacturing firm - and took advantage of this situation.
Expert:  originallawyer replied 1 year ago.
I think you could offer him whatever you wanted and he'd have to take it because you now have a letter in your possession that states that you could name your own price. If he refuses that, then you have evidence of his offer. There's nothing that would require you to use him, now or in the future. If you decide to fire him now, so to speak, a new attorney would probably have to start over on handling the documents. It might be better to start over. You certainly need a lawyer you feel like you can trust, as does your father. It is definitely a very personal choice.
Customer: replied 1 year ago.
But he does state: "Let me know what that amount is and if I find it acceptable then we will submit the final tax return . . ." Would he find $4500 acceptable if he first wanted over $30,000? A friend of mine had him do her mother's trust of $1.6 m but there was not a sub A and B trust. She actually said that he didn't charge her mother's trust but drew up a new trust for her and her husband. "But he didn't bill us on mom's. He has helped us get the apt building out of her trust and into ours with billable hours. Not much at all. Then to set ours up was $3500." And also this from same girlfriend, "Ok..husband agreed..he didn't charge us for mom's trust. I think she paid around 3,000 to set it up but not sure. We paid 3500 to set up ours. "
Customer: replied 1 year ago.
But he does state: "Let me know what that amount is and if I find it acceptable then we will submit the final tax return . . ." Would he find $4500 acceptable if he first wanted over $30,000? A friend of mine had him do her mother's trust of $1.6 m but there was not a sub A and B trust. She actually said that he didn't charge her mother's trust but drew up a new trust for her and her husband. "But he didn't bill us on mom's. He has helped us get the apt building out of her trust and into ours with billable hours. Not much at all. Then to set ours up was $3500." And also this from same girlfriend, "Ok..husband agreed..he didn't charge us for mom's trust. I think she paid around 3,000 to set it up but not sure. We paid 3500 to set up ours. "
Expert:  originallawyer replied 1 year ago.
I think if you make an offer and he doesn't find it acceptable, then I think in that instance you'd be well within your rights to walk away, or have your dad opt to walk away. In this instance, I'd say again, you have the right to work with an attorney you trust. If you or your dad do not trust him anymore, then I would definitely go with someone you do.

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