Opinion ID: 1914885
Heading Depth: 1
Heading Rank: 1

Heading: The Paul C. Jones Estate.

Text: Paul C. Jones died on July 25, 1996. Jones's sons, Gregory Jones and Jeff Jones, residents of California, were appointed coexecutors. The executors designated Waples as the attorney for the estate, and Waples opened the estate on July 29, 1996. The estate included several farms, farm products, and other assets with a value of approximately $1,300,000. On October 7, 1996, Waples wrote to the executors and requested that they send attorney fees of $33,914.41 by overnight mail. The letter stated I have completed the Estate Tax Return and the Inheritance Tax Return. This, as it developed, was not true. The executors mailed the requested fee to Waples, who had not earned the fees under our probate rules and who had not obtained an order of the court approving their payment. Waples deposited the estate check in his regular office account rather than in a trust account, holding out $914.01 in cash. The court order allowing fees was not signed by a district judge for several days. At the time the court approved payment, the respondent had not completed the services required before receipt of payment. The federal estate tax return was prepared at some time showing it was signed by Waples on April 15, 1997. However, it was not sent to the executors for their signature until June 9, 1997, more than a month after the nine-month filing deadline. The return and payment of the tax were not remitted to the Internal Revenue Service until July 9, 1997. This resulted in penalties for late payment and late filing. The estate tax return was selected for audit, and on February 11, 1998, an auditor for the Internal Revenue Service wrote to Waples requesting documents and information for the purpose of the audit. On July 1, 1998, the clerk of court issued a notice under Iowa Code section 633.32 advising the executors and Waples that they were delinquent in filing an interlocutory report due within eighteen months of the second publication of notice to creditors. On July 10, 1998, Waples filed an interlocutory report stating that the tax clearances should be received by October 31, 1998, and stating that the final report had already been prepared. On August 3, 1998, Greg Jones contacted Waples about the penalties assessed by the Iowa Department of Revenue, and Waples replied that this was the first time I had seen anything of these notices and contended that the returns had been forwarded to the executors for payment within the time allowed by law. On January 1, 1999, the IRS examiner wrote to Waples and stated that he had been waiting for eleven months to receive the documents he had requested earlier and complained that his repeated attempts to contact Waples by letter and phone had been unsuccessful. The auditor threatened that, if the required information was not provided by January 15, 1999, he would be forced to pursue enforcement procedures provided for under federal law. The auditor mailed copies to the executors. At about this point, the executors began to contact the IRS auditor directly, reported that they were dissatisfied with Waples' representation of the estate and stated that [w]e feel as though we have been left in the dark regarding much of the legal process. The auditor wrote to Waples advising him that there was additional federal estate tax due in the amount of $211,814.59 as well as $43,895.89 in penalties for failure to file and $1374.04 in penalties for failure to pay. On November 3, 1999, the clerk of court sent a delinquency notice for the estate's failure to file a final report. In November 1999 the executors hired a law firm in Cedar Rapids to complete the estate work. Waples withdrew as attorney for the estate, which, by that time, had been open for more than three years. Despite that fact, no distributions had been made to the beneficiaries. The Cedar Rapids firm completed the estate proceedings, filed amended tax returns, established a testamentary trust provided by the decedent's will, and distributed estate assets in accordance with the will. The estate paid the successor attorneys $25,000 in attorney fees. According to the commission's finding, the estate, when it was finally closed on August 28, 2002, had incurred substantial additional costs, including penalties and interest, because of Waples' mishandling of the estate.