The Iowa Supreme Court finds that attorney fees should be based on all assets in the estate, including assets that are not subject to inheritance tax. In the Matter of the Estate of Martin (Iowa, No. 10 / 04-0305, March 3, 2006).
Doyle Sanders was the attorney for the executor of the estate of Melba Martin. Based on the gross estate value shown in the inventory, which included a number of 401(k) retirement annuities, the court set the attorney fees at $15,072.
When the Iowa Department of Revenue and Finance reviewed the inheritance tax paid by the executor, it concluded the retirement annuities were not subject to inheritance tax. Under state law, maximum attorney fees are calculated based on the gross assets of the estate. The probate court concluded that attorney fees could be calculated only on the portion of the estate subject to inheritance tax, and reduced the attorney fees by two-thirds. Mr. Sanders appealed the court's decision.
The Supreme Court of Iowa reverses, holding the calculation of maximum attorney fees should include the retirement annuities. According to the court, the definition of gross estate includes portions of the estate not subject to inheritance tax.
To download the full text of this decision, go to: https://www.judicial.state.ia.us/Supreme_Court/Recent_Opinions/20060303/04-0305.asp?search=04-0305#_1.
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