Extraordinary Attorney Fees Not Awarded In Estate Case

Normally, attorney’s fees for probate work in Iowa are capped at 2% of the net worth of the estate. In some cases, the estate is so complex and requires so much time that extraordinary legal fees may be awarded by the court. When a lawyer or law firm makes an application for extraordinary attorney fees, the burden is on them to show the court that “…the nature, size, and complexity of the estate justifies the extraordinary fees.” Attorneys fees in an estate case must be “necessary and reasonable.”  That means that the services provided must have been actually necessary and probably included litigation or substantial real estate and tax matters.  

The law firm handling the estate, in this case, requested nearly $139,000 in extraordinary legal fees beyond the statutory 2% fees. The law firm argued that the estate was large (worth nearly $1,705,000) and involved complex litigation for which the firm invested many hours and dollars. The trial court judge denied the law firm’s request for extraordinary fees, reasoning that the law firm failed to prove that the services rendered were all necessary and reasonable. The court even stated that “the work necessary to defend this estate could have been performed in approximately one-fourth of the time.” 

The Iowa Court of Appeals agreed with the trial court, finding that the law firm did engage in litigation in this case, but they were fairly and reasonably compensated by the trial court for all services performed. The law firm failed to satisfy the court’s heavy burden for justifying extraordinary fees.  Thus, their request was denied. In re Estate of Janssen, No. 0-170/09-0904 (Iowa Ct. App. May 26, 2010).