Final Distribution
Case Number
Case Type Decedent's Estate Hearing Date / Time Tue, 04/28/2026 - 09:00 Nature of Proceedings Final Distribution Tentative Ruling Probate Notes: Appearances required.
Reserve request too high. An estate must be in a condition to be closed to justify an order for final distribution. (Prob. Code, Sec.11640.) When debt remains unpaid, the estate is not in a condition to be closed. (Id. at subd. (c).)
Petitioner admits via Supplement filed on April 22, 2026, that the $10,000 requested reserve amount is "intended to cover responding to any audit inquiries, amended filings if required, and related professional fees." (Sup., at p.2, lns 20-21.) While this admission does not appear to be for currently owed debts, it is admittedly for debts that are foreseeable.
The following is from a well-respected treatise on this issue: Although not required, it is advisable to include an estimate of closing expenses. Examples of estimated closing expenses include any estate taxes, interest, and penalties that will be paid after distribution; the cost of preparing final income tax returns for the estate; the cost of transferring securities to the distributees; the cost of reasonable storage, delivery, and shipping for distribution of tangible personal property to the distributees; and the cost of certifying and recording copies of the decree of distribution of real property. See Prob C Sec.Sec.11642, 11750, 11753-11754.
Some courts require more detailed information about the nature and amount of the anticipated closing expenses. See, e.g., San Francisco Ct R 14.35(I)(3). The personal representative may also wish to retain funds for any undisclosed or unknown liabilities, especially tax deficiencies later assessed against the decedent or the estate.
Apart from the reserve for estate taxes, there are some drawbacks to setting the reserve aside specifically for possible future tax deficiencies. Such action indicates--especially if the reserve is a substantial one--misgivings about the validity of the estate's position. The reserve might also be considered a trust fund for payment of the taxes, thus extending the statutory period for assessment. See U.S. v Rose (3d Cir 1965) 346 F2d 985, 989.
In addition, if the personal representative requests that the court allow for a substantial reserve (or even a reserve of more than $5,000), some courts will refuse to characterize the distribution as "final" and will require additional accounts (or waivers) before permitting distribution of any balance of the reserve. For example, in Contra Costa County, the court will not characterize the distribution as final if the personal representative requests more than a nominal reserve. If the entire estate will be distributed to a single beneficiary, such as a trust established during the decedent's lifetime, a reserve may not be necessary. (Cal. Dec. Est. Pract. (CEB 2023), Sec.31.66.)
Looking for case law or statutes not cited here? Search published authorities
Examples: “Why did the court rule this way?” · “What were the procedural grounds?” · “Is appearance required?”
Accordingly to this authority, and the admissions in the Supplement, it is recommended the reserve request be denied. In the alternative, the Court can allow a smaller reserve of $5,000, and set the matter out 90 days for review of the disposition of the reserve.
Extraordinary Fees should be denied. The Petition requests extraordinary fees in the amount of $7,052.50. This is in addition to a $26,776.12 fee, which is set by statute. Statutory fees are presumed adequate compensation in all estates:
The Legislature, after expending enormous energy on attorney's fees in probate proceedings, pointedly examining and reexamining the issue in various contexts, has determined the present statutory system of compensating lawyers is both cost effective and fair. Presumably, the public's interest is served where those bereaved are insulated from negotiating over a lawyer's fee during the traumatic post-death period. (Estate of Effron (1981) 117 Cal.App.3d 915, 925-26 [emphasis added].)
Unless counsel overcomes that presumption with evidence showing legal fees were incurred for extraordinary services that required legal expertise (In re Fulcher's Estate (1965) 234 Cal.App.2d 710, 718.["the burden of proving the necessity for the services is on the representative claiming extraordinary fees for himself and his attorney."]), extraordinary fees will be denied. (Ibid. ["The general rule is that the probate court has a large discretion in the allowance of fees for extraordinary services rendered on behalf of the estate."].))
In this case, Counsel for Petitioner has not overcome the presumption that statutory fees are adequate to compensate for work the attorney performed. The following addresses the categories in the attorney's billing statements:
Rehabilitating initial petition and family tree research. The personal representative initially attempted to prosecute this matter in propria persona. In doing so, the personal representative filed the opening petition, then hired current counsel after several probate notes indicated errors that kept the petition from moving forward. All that was required to clear those notes was a Supplement (filed on June 16, 2025) that included some light family tree research and other menial tasks that do not qualify as "extraordinary" in nature.
As stated in the previous notes: Tasks like clearing probate notes, the sale of the estate's real property, the Petition for Preliminary Distribution, reviewing bond, preparing and paying taxes, etc. are not extraordinary tasks in and of themselves. NONE of these tasks were out of the normal course of work performed by an attorney helping a client administer an estate worth over $1.3 million, thus are not extraordinary, and most are not even legal in nature (i.e. they did not require the skill/training of a lawyer).
Selling a home is not extraordinary legal work for which extraordinary fees attach, especially when a real estate broker is paid for doing so. The supplement does not explain how the services provided during the sale of a home, WHILE EMPLOYING A REAL ESTATE AGENT, were legal in nature and extraordinary.
As stated in the previous notes: While it is arguably unfair for the real estate agents to make more in fees for selling a home than for the attorney administering the estate, the legislature already took such equities into consideration when enacting the statutory fee schedule. The sale of real property is an ordinary and usual occurrence in the administration of a decedent's estate, thus does not automatically warrant extraordinary fees. Counsel here showed no circumstances during the sale of real property that required the estate to incur "legal services" not normally needed during the sale and escrow process.
Thus, the high value of real estate in this state generates a statutory fee award that is usually sufficient to compensate the personal representative and the attorney. This is especially true when a real estate agent is used to effectuate the sale. The standard courts use is " legal services in connection with the sale of property held in the estate." (CRC, Rule 7.703(c)(1).)
The policy behind statutory fee awards includes strong consideration of the complication of larger estates than that of smaller estates. (In re Buchman's Estate (1955) 138 Cal.App.2d 228, 235. See also Estate of Getty (1983) 143 Cal.App.3d 455 [discussing in dicta that larger statutory compensation can be sufficient to cover unexpected intricacies in estate administration]; and Estate of Hilton (1996) 44 Cal.App.4th 890, 912-16 [citing In re Walker's Estate (1963) 221 Cal.App.2d 792, 795] for the proposition that probate courts can disallow all extraordinary fees claims if they find statutory compensation sufficient, keeping in mind the legislature's policy of subsidizing fees in more complicated estates with those easily earned in less complicated estate ["The Legislature merely determined, in substance, that any under-compensation involved in handling small estates would be equitably adjusted in the long run by overcompensation in handling larger estates."].)
For the reasons stated above, the extraordinary fees requested in this case are not just or reasonable. Thus, it is recommended the Court deny the entire request for extraordinary fees.
Appearances: The court is open to the public for court business. The court is also conducting hearings via Zoom videoconference. Meeting ID: 160 543 3416 Passcode: 5053334
Tentative Ruling: Luciano Zepeda Martinez vs Kenai Drilling Limited Tentative Ruling: Luciano Zepeda Martinez vs Kenai Drilling Limited