When a person dies, their estate must be properly accounted for, valued, and distributed. While the dead can take some of their possessions with them to the grave, most of what they own must be distributed among the living, creditors, beneficiaries, or the state. The individual in charge of overseeing this process and ensuring that it goes smoothly is the estate’s executrix – also known as the personal representative or executor.
What Is an Executrix?
An executrix will be tasked with taking stock of the entirety of the estate, organizing a professional valuation, managing the estate’s investments and finances, dealing with final bills and commitments, attending to the needs of creditors, and finally, distributing the assets as per the decedent’s wishes, or state law. In most cases, the entire process – including the naming and titling of an executrix – occurs within the county’s probate court in which the decedent resided.
Personal representatives to an estate are entitled to payment for services rendered. It is a job and a rather complicated one for all intents and purposes – especially when larger estates are involved, with assets across state lines or even national borders. But the exact compensation afforded to a personal representative depends on the size and scope of their work, their nature as a personal representative to the estate, as well as state law. Here are a few crucial questions and factors influencing the final bill.
Does a Valid Will Exist?
A valid will – that is, one signed and witnessed before death – may detail not only who the court should pick as a personal representative to the estate but their level of compensation as well. To that end, some wills can note the exact dollar amount the personal representative should receive. In contrast, others might bequeath a portion of the estate to the representative (which acts as a tax-exempt payment, versus otherwise taxable income). Of course, a personal representative is still required without a will.
Are There Extraordinary Services Rendered?
An executrix or executor is entitled to a greater payment should they have rendered extraordinary services to the estate and its beneficiaries. In other words, if an executrix went above and beyond to fulfill their responsibility, then they may be entitled to a larger-than-agreed-upon compensation, such as (but limited to):
- Defending the estate from litigation.
- Pursuing litigation in the estate’s favor.
- Overseeing and concluding the sale of property for the estate (to split the proceeds fairly among the estate’s beneficiaries).
- Or managing the decedent’s business in the interim between their death and the naming of a successor.
However, it is not up to the courts to decide when a service is considered extraordinary and calling for additional compensation. That is something to be decided between the estate’s beneficiaries and the executrix.
How Much Has the Personal Representative Paid Out-of-Pocket?
An executrix is entitled to any costs they had to pay out-of-pocket. In most cases, the personal representative to an estate will use the estate’s assets to pay for the expenses of the probate process. But certain expenses are incurred before an estate is even opened for probate, such as funeral bills, the coroner’s fee, and the doctor’s fee for calling the time of death. Therefore, aside from professional compensation for duties and services rendered, an executrix may be reimbursed for what they had to pay before the probate process began.
Are There Multiple Representatives?
If there is more than one personal representative and the will makes no mention of how either is to be compensated, then state law usually dictates how much money they receive for their work and how it should be split. In some states, personal representatives receive equal halves. In other states, both are entitled to a full fee.
Is the Representative a Person or an Entity?
There are businesses, firms, and legal institutions that render services such as the personal representative of an estate. These businesses have their own standard representative fees, and their fees at the decedent’s time of death will be used to calculate the compensation for the company.
Is the Executrix the Estate’s Attorney?
If the personal representative or executrix of the estate is also the decedent or estate’s attorney, then they may be entitled to their typical hourly fee, unless state law specifically decides their compensation as an attorney to the estate or unless they entered into a separate agreement with the decedent before death.
What Do the Beneficiaries Have to Say?
In the absence of a will or any information in the will regarding the executrix’s compensation, the estate’s beneficiaries may negotiate and agree with the executrix regarding what would count as fair compensation. This can either take place before the probate process begins or towards the end of it. In certain states, the probate court must read and approve this agreement for it to be valid.
What About State Law?
Different states have different rules when it comes to probate and the compensation of a personal representative. In most cases, this is calculated as a percentage of the estate’s gross value (before creditors, bills, and taxes). In other states, the representative’s compensation may be calculated as a percentage of every financial transaction or sale they oversaw during the probate process.
Lastly, some states leave compensation in the hands of the representative and the estate’s beneficiaries if there is no word from the will. However, these states may still offer guidelines for reasonable and fair compensation or must approve of any agreement before it can be made valid. For example, in California, an executrix receives a percentage of the estate’s value, depending on the estate’s total value. As per the California Probate Code, an executrix will usually receive:
- 4％ of the first $100,000 of an estate’s gross value.
- 3％ of the next $100,000 of an estate’s gross value.
- 2％ of the next $800,000 of the estate’s gross value.
- 1％ of the next $9 million of the estate’s gross value.
- 0.5％ of the next $15 million of the estate’s gross value.
For larger estates, the local courts will decide compensation on a case-by-case basis. An executrix may be entitled to additional compensation or attorney’s fees wherever appropriate.