IMO Trust for Grandchildren of Wilbert L. and Genevieve W. Gore
Date Submitted: November 9, 2012
Chad M. Shandler, Esquire, Richards, Layton & Finger, P.A.
David E. Ross, Esquire, Seitz Ross Aronstam & Moritz LLP
Grover C. Brown, Esquire, Gordon Fournaris & Mammarella, P.A
Anthony A. Rickey, Esquire Seitz Ross Aronstam & Moritz LLP
Michael A. Weidinger, Esquire Pinckney, Harris & Weidinger, LLC
Litigation over the Pokeberry Trust is drawing to a close. Only applications for attorneys' fees and expenses remain:
1. The Co-Trustees seek reimbursement of their attorneys' fees and expenses. The principal challenges by Susan and the Otto Grandchildren are directed at the recovery of fees charged by tax counsel.
2. The Objecting Grandchildren ask the Court to shift their fees (as well as the fees of the Co-Trustees and the Guardian ad litem) to Susan and the Otto Grandchildren. Alternatively, they ask the Court to approve payment of their fees by the Pokeberry Trust. Their first request is vigorously contested; there is no opposition to their alternative request.
3. Susan and the Otto Grandchildren request that the Court order payment of their attorneys' fees and expenses from the Pokeberry Trust. Their applications are opposed by the Co-Trustees and the Objecting Grandchildren.
The Co-Trustees' Application
A trust should pay its trustee's attorneys' fees and expenses "when the attorneys' services were necessary for the proper administration of the trust" or "where the services otherwise resulted in a benefit to the trust." The fees and expenses of the Co-Trustees' litigation counsel were substantial but these proceedings were protracted and required significant effort. Aside from some grumbling, there is no opposition, and the Court concludes that the fees and expenses of the Co-Trustees' litigation counsel were reasonable and necessary for the administration of the Pokeberry Trust.
The fees and expenses of tax counsel are more difficult to assess. The tax firm retained by the Co-Trustees is highly respected, and it is not a surprise that its work does not come cheap. The Co-Trustees, at their own risk, have paid the bills of tax counsel, but not with Trust funds. The Court has the advantage of having first-hand knowledge of the litigation efforts of the Co-Trustees' litigation counsel, but it has very little direct knowledge of the work of tax counsel. The tax issues associated with the Pokeberry Trust are complicated. Even more difficult were the tax ramifications of the settlement almost achieved through mediation in 2007. Spending large sums on tax advice about a potential settlement that did not occur may, at least initially, seem unnecessary. The Co-Trustees, however, concluded— and with some input from other parties—that ongoing and current tax analysis that kept up with the complex settlement negotiations and documentation made practical sense. Reaching agreement on a settlement accomplishes little if it falls apart because it is later submitted for review by tax ...