An Attorney or anyone has substantial duties in handling probate matters. When a Will is probated, there are deadlines to meet certain obligations, e.g. filing of tax returns, paying taxes, filing of an inventory and getting an appraisal of all assets.
In one case, an attorney took on the responsibility of handling the probate proceedings for a client. This attorney, who only handled traffic tickets for the deceased in the past, eagerly took on representation of the heir of the estate.
The attorney hired accounting firms to file the estate tax returns. This was also done untimely. The attorney made a tax payment of $10,000 stating that she believed that there was only $20,000 in the estate bank accounts. Another accounting firm was hired and the attorney eventually paid the tax due of $825,000; however, the IRS assessed penalties totaling $439,621. The probate court did not see why the attorney only paid $10,000 in IRS taxes knowing full well that $825,000 was due to the IRS. The probate Court awarded $439,621 as a surcharge to the attorney.
The attorney, now been personally responsible for the surcharges, filed Chapter 7 Bankruptcy.
This surcharge was viewed as non-dischargeable since the attorney consciously and recklessly disregarded the risks of not filing the tax return and timely paying the taxes owed.
- You cannot consciously and recklessly cause a surcharge or fee to be assessed to you and then expect it to be discharged in Bankruptcy.
- Handling the probate of someone’s estate is a serious manner and has great responsibility.
- Always hire an attorney who is familiar with the task at hand; hire an attorney who specializes in an area of law.
- Sometimes an attorney “can be a jack of all trades but a master of none”