The executor, sometimes called the personal representative, carries out the instructions in the will about how to pay the deceased person's debts and distribute his property to the beneficiaries he has left behind. All states allow executors to receive a fee for this work, but how the fee is calculated varies by state.
Create an affordable will with LegalZoom
Some state laws provide that an executor of a will receives a certain percentage of the estate in exchange for completing her duties. For instance, the Kentucky Probate Code allows an executor or personal representative to be paid up to 5 percent of the value of the estate, plus 5 percent of any income made on the estate's investments while the personal representative was managing them. Kentucky allows attorneys who handle probate matters to be compensated in the same way.
At least two states, California and Nevada, have a fee schedule set by law that is used to compensate executors for their work on an estate. California, for instance, has a fee schedule that allows an executor to receive 4 percent of an estate up to $100,000, then decreasing percentages of estates larger than $100,000, according to attorney Stephen C. Gruber. California allows for attorneys to receive fees for work on an estate according to the same fee schedule.
States that have adopted the Uniform Probate Code as their probate law do not usually specify a percentage, hourly rate or other fee for the work of an executor. Instead, their probate laws state that the court must set a "reasonable" fee for both personal representatives and attorneys who work on probate estates. As of 2010, states that use the Uniform Probate Code and its reasonableness rule are Alaska, Arizona, Colorado, Hawaii, Idaho, Maine, Massachusetts, Michigan, Minnesota, Montana, Nebraska, New Jersey, New Mexico, North Dakota, Pennsylvania, South Carolina, South Dakota, Utah and Wisconsin, according to the Arizona State Courts.
Insolvent and Indigent Estates
Some estates are mired so deeply in debt that their assets cannot pay all of their bills. These estates are known as insolvent estates. Similarly, many people die indigent, or with almost no assets to their names. According to the Arizona State Courts, most states have special rules that allow an executor of an insolvent or indigent estate to be paid for her work. For instance, an insolvent estate may be broken up by the probate court, with each creditor and the executor receiving some percentage of the assets. Executors of indigent estates are often paid by the state's legal aid fund, which provides legal services to indigent persons.
References & Resources
- Arizona State Courts: Probate Fees - A State by State Comparison
- Stephen C. Gruber: Probate in California
- Kentucky Revised Code 395.150: Compensation of Representatives
- Minnesota Courts: Probate Dictionary
- Judicial Education Center: Probate Judges' Handbook
- University of Michigan at Flint: Sample Last Will
- Jupiterimages/Goodshoot/Getty Images