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Sunday, May 20, 2018

Teaser - New Publication Coming

A heads-up to readers that I will shortly be publishing a treatise that should be of interest to many of you. I have been hard at work on this project for the last 2-3 years, and hope to have it out in the next few weeks. Frankly, if I had known it would take me so long to write I probably would never have started, but I believe it is unique in what it covers and fills a need.

Some of you have asked me about the reduced volume of posting by me in Rubin on Tax (especially in recent weeks), and this is the reason why - there are only so many non-working hours in the day so something had to give. I intend to get the volume back up again, once this project is behind me.

More details to follow soon!

Possible Fix Coming to Charitable Gifting Problem

For many taxpayers, the 2017 tax law changes removed an incentive to many taxpayers to make charitable contributions. As an itemized deduction, charitable contributions provide a deduction only to taxpayers who itemize their deductions. With a much larger standard deduction, and reductions in available deductions for state and local taxes and mortgage interest, many taxpayers who used to itemize will no longer do so. This is especially true for lower and middle income taxpayers. Thus, many charities expect reductions in gifting to them do to the loss of income tax benefits to donors.

A bipartisan bill, the Charitable Giving Tax Deduction Act, has been introduced into the House of Representatives that would address this issue. The Act would make charitable deductions an “above-the-line” deduction. This means that taxpayers can deduct contributions against their income, whether or not they itemize their deductions. The income tax incentive to make charitable gifts would thus be restored, and even enhanced from the pre-2017 tax law changes.

Whether the bill will pass is anyone’s guess at this time. Its bipartisan support and its charitable nature probably gives it more of a shot to pass than most bills.

Sunday, April 22, 2018

Takeaway from Recent Decision on Florida Attorney Extraordinary Attorney Fees For Ordinary Administrative Work in an Estate [Florida]

In this case, the Personal Representative sought fees for serving as both PR and attorney for the estate - while not totally clear from the opinion, it appears the PR sought those fees using the presumptively correct fee Florida statutory fee schedule schedule.

The PR also engaged outside counsel to assist with some matters. It is the fees for that outside counsel that the court was principally concerned with. The court ended up substantially reducing the fees sought by the outside counsel either outright, or deferring the consideration of some of those fees until later since some of them were too premature for the court to rule on. Some of the conclusions of the court were:

a. Work by the office of the outside attorney to determine addresses of 53 interested persons for purposes of receiving formal notice regarding a determination of beneficiaries and pertaining to the sale of property and determination of homestead did not constitute “extraordinary” services entitling an attorney for compensation. Instead, such work was of the “ordinary” services character. The court did note that proceedings for determination of beneficiaries can be considered extraordinary in appropriate circumstances.

b. Work by outside attorneys to strike a late claim upon failure of a claimant to file an independent action were similarly not “extraordinary” services of the attorneys.

c. Review by outside attorneys of prepared estate income tax return was determined to be duplicative of the Personal Representative’s and CPA’s efforts.

d. Paralegal time of outside attorney’s office relating to preparing addresses and Fed Ex mailers, processing paperwork to the computer, scheduling hearings, coordinating phone conferences, and similar services were found to be administrative and secretarial in nature and not legal services.

e. In regard to the employment by the estate of multiple attorneys, the court noted: “While parties have the right to employ as many lawyers as they choose, the Court will not assess lawyer fees for or against any party for more than one lawyer for a matter in which no more than one lawyer is required. . .As such, duplicative time charges by multiple attorneys working on the case are generally non-compensable and the Court cannot award compensation for various extensive conferences between lawyers without any indication of how those conferences advanced the case. . .. Finally, “excessive time spent on simple ministerial tasks such as reviewing documents or filing notices of appearance” is normally not compensable. . . Nor are duplicative reviews and consultations by numerous attorneys.

It appears that most of the problems here would not be problems as to compensating the PR or the attorney for the estate under ordinary fee arrangements - instead, the delegation of ordinary administrative tasks to another attorney while the PR and estate attorney were charging for ordinary services was a problem.

Note, that this opinion was issued by the Circuit Court, and is not an appellate decision. Thus, its precedential value in other cases may be limited

RE: ESTATE OF GINGER ECKERT ROBERTS, 15th Judicial Circuit in and for Palm Beach County, Probate Division, Case No. 50-2016-CP-004272. January 4, 2018.