The executor of the estate, also referred to as the personal representative, is usually appointed by the individual who creates the will. In fact, his name is included within the will along with the specific responsibilities that he must complete. The executor of the estate is entitled to a fee for performing his duties, provided […]
The executor of the estate, also referred to as the personal representative, is usually appointed by the individual who creates the will. In fact, his name is included within the will along with the specific responsibilities that he must complete. The executor of the estate is entitled to a fee for performing his duties, provided the will is valid and legally binding.
Fees or Payment for the Executor of the Estate
Several rules of thumb or generalized guidelines are in place to help in the determination of the fee that the executor of the estate may collect. The last will and testament often includes clues as to what this fee may be. In some cases, the fee is limited to a predetermined sum of money. In other cases, the fee is put aside since a special bequest is designated to the executor of the estate in lieu of payment. When a case occurs in which the fee has not been determined or a bequest has not been made, the particular laws of the state come into play to calculate an appropriate fee for services rendered.
When no fee has been specified, the state law is used to determine the fees for the personal representatives of the estate. In many states, the fees are determined by the probate court. This court will take into consideration local guidelines and determine what they consider to be a fair and reasonable payment. However, there are some states that use a percentage-based guideline for determining the fee. When this type of calculation is used, it involves a sliding scale where the percentage decreases as the numerical value of the estate increases.
In some cases, the beneficiaries of the estate participate in the determination of the fees or payments to be made to the executor. Typically, this would happen early on in the process. However, it might also occur toward the end of the proceedings when the disbursement of the estate is almost concluded.
Fees or Payment When Multiple Executors of the Estate Exist
In some cases, a will calls for two or more individuals to perform the duties of the executor of the estate. When this happens, the will should be examined for instructions on the payment due to each executor or personal representative. If no guidelines are in evidence, then state law will be used to determine the fees or payment of each executor. It is possible that the fee will be divided equally among the personal representatives. In other cases, some states dictate that each representative will be allowed to collect the full fee as determined by the state.
Extraordinary Fees or Payments for the Executor of the Estate
During the disbursement of some estates, extraordinary fees or payments for the executor of the estate are incurred. This happens when services above and beyond those typically demanded of the executor are called into play. Services that merit extraordinary pay include: conducting or defending litigation for the estate, participating in tax proceedings or disputes, ongoing participation in the decedent’s matters, and overseeing the sale of some or all of the decedent’s personal property, vehicles, or real estate.
Payment of the Fees for the Executor of the Estate
Payment of the fees is generally made at any time during the handling of the estate. Out-of-pocket costs incurred by the personal representative are typically repaid at the time that they occur. Other fees, both ordinary and extraordinary, are generally paid at the conclusion of the disbursement of the estate. However, these fees can be paid at any time.