The New Mandatory Fee Guidelines

Fee Guidelines. The new provisions of Rule 33 of the Arizona Rules of Probate Procedure, which are effective on September 1, 2012, require the Superior Court to follow the new statewide fee guidelines set forth in the Arizona Code of Judicial Administration. In most cases, these guidelines will come into play when the court is considering a petition for approval of fees. Attorneys representing personal representatives don’t generally need to file such petitions (see Rule 33(G)), but these guidelines also apply whenever the court is determining “reasonable compensation” under the probate code (Rule 33(F)). Since such a determination can occur in informal probate cases, personal representatives and their counsel should be aware of and comply with these guidelines. These new mandatory guidelines can now be seen at: http://www.azcourts.gov/Portals/0/admcode/pdfcurrentcode/3-303_New_2012.pdf

A Few Important Points. While each probate practitioner should review and understand every aspect of these guidelines, the following are some major points of particular interest.

• The fee guidelines don’t apply if compensation is set forth in the will.
• Reasonable compensation is best determined on a case-by-case basis in light of consistent compensation guidelines
• The judicial officer has discretion to assign more or less weight to each of the compensation factors as deemed just and reasonable
• While travel and waiting time can be billed at regular rates, they may be deemed unnecessary if written or electronic correspondence or telephonic hearings would have served the need without unnecessary cost
•  if services could have been performed by someone with a lower billable rate, that rate should apply to these services
• clerical and secretarial services are not billable on an hourly basis, but are to be factored into the hourly rates of the professionals who use those services
•  reimbursable costs incurred in the best interests of the estate are to be reimbursed at actual cost, with no markup
•  only one attorney may bill for attendance at hearings, depositions, etc. (absent good cause)
•  flat fee compensation (for all or part of an engagement) is permissible if (a) the flat fee enhances the predictability of the amount of compensation, (b) the flat fee helps to align the interest of the professional with that of the estate (e.g., the professional is thereby more motivated to seek the interests of the estate), (c) the flat fee is disclosed in advance, in writing, in detail, with reference to the hourly fees that would otherwise be charged, and (d) the professional documents the actual efforts covered by the flat fee

Many other specific points are included with the guidelines. Be sure to become well acquainted with them and to modify your billing practices as needed to ensure conformity with the guidelines and to continue to receive reasonable compensation for your services.

Mandatory Training for Non-licensed Fiduciaries

The Training Requirement. Rule 27.1 of the Arizona Rules of Probate Procedure, which is effective on September 1, 2012, requires individuals who are not licensed fiduciaries to “complete a training program approved by the Supreme Court before letters to serve as guardian, conservator, or personal representative are issued.” This requirement applies unless otherwise ordered by the court. It also doesn’t immediately apply in the case of temporary appointment of guardians and conservators in emergency situations under A.R.S. § 14-5310(A), A.R.S. § 14-5401.01(A) or A.R.S. § 14-5207(C). In these situations, the training program must be completed “within thirty days of appointment or before the permanent appointment of the fiduciary, whichever is earlier.”

The Nature of the Training. The Internet web site for the Arizona Judicial Branch, http://www.azcourts.gov/probate/Training.aspx, has now been updated to include the required training program. Training for unlicensed personal representatives includes two online videos. The first is a general overview, entitled Introduction to Serving as a Fiduciary, that is applicable to guardians, conservators, and personal representatives. This helpful video can be viewed in fewer than fifteen minutes. The second online video that must be watched by unlicensed personal representatives is entitled Welcome to Personal Representatives Training Module. This second online video can also be viewed in fewer than fifteen minutes. At the end of each online video is a page that can be printed, signed and dated, and submitted to the Court as proof of training.

Where to Find the Training Programs. The Internet web site for the Arizona Judicial Branch also explains that these programs “will be delivered online and available in alternate formats through county superior courts.” We didn’t check all county web sites, but we did locate the training videos on the Maricopa site at http://www.azcourts.gov/probate/Training.aspx.

Document Changes. The AvidLaw templates for the Statement of Informal [Probate and] Appointment of Personal Representative have been updated to contain the appropriate language to implement this new requirement. We have also updated the applicable AvidLaw checklists to remind you that this training must be completed and reported to the Court prior to the issuance of Letters and to include the applicable Certificates of Authenticity with the documents to be filed.