New payment guidelines ease probate fees’ strain

The elderly and disabled get relief

Lise Olsen (lise.olsen@chron.com)
September 4, 2007
Houston Chronicle (TX)

Attorneys are collecting about one-third less money from the elderly and disabled in Harris County’s probate courts under new payment guidelines put in place by judges this year in response to a Houston Chronicle investigation.

Guardians, most of them court-appointed lawyers, charged an average of $8,300 per case in 2006, compared with $5,300 so far this year, reports show.

In its investigation, the Chronicle found appointees, often judicial campaign contributors and people repeatedly assigned court business, were charging as much as $400 an hour for nonlegal work, such as visiting pawn shops, attending a ward’s funeral and preparing and submitting their own bills.

When questioned about the fees, the court’s four judges decided to change the payment system even before the newspaper’s stories were published. Under those new rules, which took effect in January, appointees are barred from charging legal fees for nonlegal work.

Even legal fees are capped at $300 or less.

Guardians are appointed by probate judges to represent people who have been judged “incapacitated,” unable to tend to their own medical and financial affairs. The fees are reviewed by judges, but paid out of the estates of their disabled or elderly wards.

About 300 people have lawyers serving as their guardians in Harris County — more than anywhere else in Texas.

In all, court-appointed guardians, mostly lawyers, were ordered to be paid $1.05 million by Harris County judges from January to July, compared to $1.8 million for the same period in 2006, reports show.

Among those who have benefited from the change is Bill Landfield, a Rice University graduate and entrepreneur who has been under a guardianship since he suffered a stroke at 65 during a workout. From 2003 to 2005, he paid some of the highest guardian case fees in Harris County — about $350,000.

Landfield’s case was complicated by a contentious divorce settlement, sale of his business and the setting up of a trust. Yet in 2006, with many issues resolved, his guardian’s fees totaled $30,000. Under new guidelines this year, Landfield has been charged about $10,000 so far.

A review of itemized bills in two dozen other cases shows that many lawyers voluntarily reduced their bills or had them reduced by judges whose staff members noticed excessive charges in 2007. One $137,472 guardianship fee was cut to $100,000.

The Chronicle found a few instances where questionable charges did slip through.

One lawyer, for example, initially charged $200 an hour for buying food for her ward’s dog, purchasing clothes at Target and for talking to a dog trainer. The Target and dog food charges were cut to $100 an hour, but the talk with the dog trainer was not reduced.

Across the state, family members most often serve as guardians. They are typically unpaid or receive 5 percent of an estate’s annual income and expenses as commission, the standard under state law.

In Harris County, judges appoint lawyers to serve as paid guardians more often than in other large counties. Usually those appointees get legal fees much higher than the standard commissions.

There are virtually no alternatives to lawyers here for dozens of people who have been ruled “incapacitated” by local judges and who, like Landfield, have assets but lack family members willing to serve. The county-run guardianship service is reserved for the poor.

Meanwhile, several other large counties, including Travis and Tarrant, have relatively new professional guardian services that judges can use instead, according to records and interviews.

Landfield fears growing court-ordered fees could end his dream to bequeath his estate to his beloved alma mater: Rice University.

“I’m running out of money, that’s what’s happening,” he said. “I want out of there, I want out of the deal.”

Now that a bank trustee manages the bulk of Landfield’s estate, his lawyer guardian, W. Cameron McCulloch Jr., has asked the court to be allowed to resign. But no one has been found to take his place.

McCulloch said guardianships are a small part of his legal practice and he would like to see professional guardian services offered in Harris County.

“Frankly, I don’t think a lawyer is best equipped to be guardian in most cases — it’s more of a social worker’s job,” he said.

Probate Judge Rory Olsen, who oversees Landfield’s guardianship, said new fee guidelines seem to be reducing costs in many cases. But he said he would welcome less expensive alternatives to appointing lawyers as guardians.

Olsen said he also wishes more people would plan ahead and designate someone to have power of attorney or serve as guardians in advance of accidents, disability or old age.

That way, he could follow their instructions instead of appointing someone himself. “If people would do that, you could avoid a lot of ugly showdowns.”

Probate critic Mike Epstein, a Houston businessman whose mother has been under a guardianship for years, called the guidelines “a step in the right direction.”

But he said he wants judges to limit payments even more and use lawyers less.

RESOURCES

BY THE NUMBERS

New payment guidelines have reduced the fees paid for probate services in HarrisCounty:

Average guardianship fees
• 2006: $8,300
• 2007: $5,300 (January to July)

Total amount ordered paid to guardianship appointees
• 2006: $1.8 million (January to July)
• 2007: $1.05 million (January to July)

Total amount ordered paid in cases that include guardianships, estate administration and trusts
• 2006: $4.73 million (January to July)
• 2007: $3.04 million (January to July)

Source: Chronicle analysis of HarrisCounty Clerk’s reports from all four probate courts

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