January 4, 2015
In general, a Personal Representative of a decedent’s estate may not pay legal fees out of the probate estate without first getting approval from the Orphan’s Court overseeing the estate administration. A Personal Representative has to be careful about this rule. For example, if the Personal Representative hires a lawyer to prepare a deed, oftentimes, the deed preparer will simply send a bill for services without notifying the Personal Representative of his or her duty to get court authorization to pay that bill. It would be improper for the Personal Representative to simply pay that bill without obtaining court authorization to do so.
Similarly, a Personal Representative should get court authorization to pay any legal fees incurred before death. There are two exceptions to obtaining such prior authorization. Some might argue that such authorization would not be required if the lawyer whose fees are being paid files a claim in the estate for such fees, and the Personal Representative pays the claim, which payment is reflected on an estate administration account (the argument being that such payment is the payment of a claim and not payment of legal fees, per se); however, the conservative way to do so would still be to obtain court authorization, or to pay such amount using the method discussed in the paragraph below.
Another method for paying legal fees incurred by the decedent before death is for the Personal Representative to provide all interested persons and all unpaid creditors with a Notice of the Personal Representative’s intention to pay such legal fees. That notice will provide the interested persons and unpaid creditors with a time period in which such persons could object to such payment, and if such objection is properly and timely made, the Orphans Court will hold a hearing to determine how much of such fee is to be paid using estate funds. If no objections are made within the allowable time, however, then the Personal Representative may pay such legal fees incurred before death with no further court action. There is a particular rule of court that allows legal fees to be paid in this manner.
William M. Gatesman is skilled in the various methods of paying legal fees from a probate estate and assists clients with the proper administration of estates, including the payment of legal fees using estate assets. As stated elsewhere on this website, these article are of general interest and readers should not consider these articles to constitute legal advice. William M. Gatesman stands ready to give legal advice to particular clients in jurisdictions where he is licensed to practice law. Please contact Mr. Gatesman if you would like to obtain legal advice regarding the matters addressed on this website.
March 1, 2013
Mom is in a nursing home. As part of an asset preservation plan, Mom’s house will be transferred to her children and she will apply for Medicaid benefits.
In digging into the matter, however, the family discovered that “Mom’s house” actually is titled in Dad’s sole name (Dad died in 1989) and Dad’s former wife, as co-owners. Mom and Dad have resided in that house since they were married and everyone assumed that when Dad died, Mom owned the house (as is typical when a husband and wife live in a property that they own together). However, Mom never was on the deed.
To make matters worse, Dad died without a will and nobody bothered to open a probate estate in 1989 to deal with the real property. Even more complicated is the question as to whether Dad’s former wife survived him, which would mean that the house belonged to someone else, and not to Mom.
Click here to read the rest of the story…
October 13, 2012
There are several new laws affecting probate in Maryland that became effective October 1, 2012. This article will address those statutory changes.
Click here to read the rest of the story…
July 15, 2011
Several lawyers have been pondering whether it is illegal for a Personal Representative to bring a legal action without a lawyer because doing so would be considered the unauthorized practice of law.
This office was involved in a case a few years ago in which the Maryland Court of Special Appeals ruled that a Personal Representative (who was not also an estate beneficiary) may not pursue a legal action in Circuit Court without a lawyer. The Appellate Court ruled that doing so constitutes the unauthorized practice of law. The Court ruled also that an estate is not a person who can pursue a legal action “pro se”.
When an individual goes to court without a lawyer, such person is said to be acting “pro se”. Only individuals are allowed to pursue legal actions in court on a pro se basis. Parties who are not individuals, such as corporations, may not do this, but rather, must be represented by a lawyer.
According to the Court of Special Appeals in this unpublished opinion, an estate likewise must have a lawyer to pursue a legal action in Circuit Court.
You may click here to read the case.
March 14, 2011
William M. Gatesman and the Michael G. Day Law Office recently assisted a client in the following situation. During her husband’s lifetime, the client and her husband transferred their real estate to various trusts using deeds that identified the trust as the recipient or grantee of the property, specifically using the name of the trust without including the name of the trustee.
Deed to Trust Must Name Trustee
Under current Maryland law, such a deed would be effective to convey the property to the trust. However, at the time the deed was signed, Maryland law required that the trustee of the trust (i.e. an actual person) be listed as the grantee in order for the deed to be effective. Listing the trust itself as grantee without also listing the trustee by name was ineffectual. Consequently the client’s deeds were not effective and there was a “cloud on title”, meaning that the property could not be sold until the problem was resolved.
In this case, because the original deeds to the trusts were not effective, we needed husband and wife to sign confirmatory deeds that included the name of the trustee as grantee. However, because husband had died, he could no longer sign a confirmatory deed. And even though his wife held his power of attorney, a power of attorney is no longer effective when the principal dies.
To complicate matters further, while the real property is located in Maryland, the couple had since moved to another state. Since all of their other property had effectively been conveyed to the trusts, no probate proceeding was necessary in such other state even though their wills were on file with the court in that state.
Typically, in cases were an individual is domiciled in another state and dies owning real property in Maryland, one first opens an estate in the state of residence and then undertakes a streamlined “ancillary administration” in the Maryland probate court.
No Clear Procedure
While our office resolved this matter some time ago, it is evident from inquiries by other probate lawyers in an email discussion forum that some lawyers wonder whether a Maryland probate can be opened to address such an issue if there is no probate in the state of domicile.
In fact, Maryland’s rules of procedure and the statutes addressing the jurisdiction of Maryland’s probate court do allow a family member to open a probate estate in Maryland in such circumstance. On that basis, we were able to have a Personal Representative appointed in Maryland for husband’s estate for the sole purpose of executing the confirmatory deed which wife also signed. In this way, we were able to remove the cloud on title that affected the marketability of the properties.
This is one example of the type of complex situation we are called upon to resolve on behalf of our clients on a day to day basis.
January 2, 2008
Battley v. Banks (Md. App. December 20, 2007)
The Gatesman Law Office assists clients in the appointment of a guardian for persons who become incapacitated and cannot make personal or financial decisions for themselves. Guardians are entitled to be compensated for their services, but they must petition the guardianship court for approval of such compensation.
When the disabled person, called the “ward” of the court, dies, the guardian must prepare a final account of the ward’s assets. That account should include the guardian’s final request for compensation.
Whether the guardian may pay such compensation to himself out of the guardianship assets before the ward’s assets are turned over the personal representative of the ward’s probate estate depended on the county in which the ward resided. The courts in different counties applied different rules.
Now, however, the rule is clear. Click here to read the rest of the story…