Opinion ID: 2823814
Heading Depth: 4
Heading Rank: 1

Heading: Administrative Expenses

Text: Â¶31Â Â Â Â Â Â In dealing with administrative expenses, the probate court determined that â[a]ll administrative expensesâ would be included in the general computation of administrative expenses, regardless of whether they were âoccurring outside of the control of the surviving spouse or reasonable and necessary to the administration of any estate of this size and complexity.â The court acknowledged that this would âdistort[]â the value of the elective share as it existed on the decedentâs date of death, but it intended to address that distortion through the equitable adjustment. Therefore, the courtâs decision to apportion the estate administration costs in this way hinged on the critical assumption that it had authority to award an equitable adjustment to the statutory elective share. Â¶32Â Â Â Â Â Â Specifically, section 15-11-203 dictates that the value of the augmented estate includes the value of the decedentâs probate estate, reduced by administrative and certain other expenses. In other words, an electing spouse receiving fifty percent of the augmented estate will also be responsible for fifty percent of the administrativeÂ expenses. Administrative expenses in this case totaled $276,225.20 in 1996 but had ballooned to $16,783,615.50 by final distribution of the estate in 2010. Importantly, although the Probate Code provides that the property comprising the augmented estate is valued at the time of death, the administrative expenses component continues to increase during probateâi.e., its value is not, and cannot, be determined based upon the date of death. In this extremely prolonged case, the estateâs rising administrative expenses consumed a significant portion of the augmented estate, thereby reducing Mrs. Berenâs elective share by over $8 million compared to its value on the date of her husbandâs death. Â¶33Â Â Â Â Â Â No particular provision in the Probate Code displaces a probate courtâs authority to grant an equitable adjustment based on excessive administrative expenses not attributed to a spouseâs actions in an elective-share proceeding. While the phrase âdate of deathâ in the statutory definition of value, Â§ 15-11-201(11), displaces a probate courtâs ability to grant an equitable remedy based upon appreciation and income to the augmented estate, there is no evidence that the administrative expenses here were connected to the increase in value of the estate. Further, while the value of the property comprising the augmented estate must be ascertained based upon date of deathâand therefore the estateâs performance after that date cannot be considered in an elective-share proceedingâadministrative fees cannot be ascertained as of date of death because they continue to increase during estate administration. Â¶34Â Â Â Â Â Â While the statuteâs plain language dictates that administrative costs must be deducted from the augmented estate, as they were in this case, nothing in the CodeÂ precludes a probate court from granting an equitable adjustment based upon excessive administrative fees when justice so requires. The record supports the probate courtâs finding that excessive administrative expenses unfairly impacted Mrs. Berenâs elective share. Under the extraordinary circumstances of this case, the probate court retains equitable authority to account for the unfair burden of administrative expenses. Â¶35Â Â Â Â Â Â On remand, the probate court may award Mrs. Beren an equitable remedy based upon the excessive administrative expenses in this case.