"Will attorney fee negate tax on interest income on 1041?"
Yes, but the estate will be required to file an income tax return since it had gross income for the tax year of $600 or more.
See https://www.irs.gov/instructions/i1041#idm140630132235568
Also, if the return is a final return, the beneficiaries could possibly benefit from the final year deduction on their personal income tax returns.
