18 May Personal Representative Compensation: Does an Executor Get Paid?
Personal Representative Compensation: Does an Executor Get Paid?
By: Barry E. Haimo, Esq.
May 18, 2015
BARRY HAIMO: An executor or personal representative of an estate can get paid. They can be entitled to compensation. Sometimes estate plan documents provide for no compensation, but under the laws of the state of Florida, by default, such a person or persons or entity can receive compensation.
An executor—officially known in Florida as a “personal representative”—is in charge of a number of the administrative responsibilities of settling an estate. A personal representative locates and executes the terms of the deceased person’s last will and testament as well as settles the decedent’s accounts with creditors, among a number of other duties.
Most personal representatives perform this service to honor the memory of the deceased person, not because it is a job that pays particularly well.
That being said, there are a number of out-of-pocket expenses associated with the duties of a personal representative. Furthermore, there is considerable time and effort expended during the process of settling an estate. It’s not unreasonable to wonder if a personal representative is compensated for their significant role in the probate process.
Do Personal Representatives Get Compensated?
Personal representatives can be paid for their services. Florida statutes explicitly mention how a personal representative should be compensated for his or her work, using funds from the estate.
“A personal representative shall be entitled to a commission payable from the estate assets without court order as compensation for ordinary services. The commission shall be based on the compensable value of the estate, which is the inventory value of the probate estate assets and the income earned by the estate during administration.”
Personal Representative Compensation for Ordinary Services
The law distinguishes between compensation for “ordinary services”, which describes the general responsibilities of all personal representatives and “extraordinary services” which are any unforeseen costs that might accumulate during the estate settling process.
Compensation for ordinary services is based on the value of the estate. Below are the rates outlined by the relevant statute. A personal representative is compensated:
- At the rate of 3 percent for the first $1 million in estate assets.
- At the rate of 2.5 percent for all above $1 million and not exceeding $5 million in estate assets.
- At the rate of 2 percent for all above $5 million and not exceeding $10 million in estate assets.
- At the rate of 1.5 percent for all above $10 million in estate assets.
If the personal representative pays for any probate-related costs out-of-pocket, he or she is entitled to be reimbursed for those costs. In addition, Florida law allows a personal representative to be compensated for:
- The sale of real or personal property.
- The conduct of litigation on behalf of or against the estate.
- Involvement in proceedings for the adjustment or payment of any taxes.
- The carrying on of the decedent’s business.
- Dealing with protected homestead.
- Any other special services which may be necessary for the personal representative to perform.
Additionally, the personal representative can petition the courts for further compensation, if the circumstances of a particular case warrant extra funds. The court will weigh a number of factors, including the complexity of settling the estate, and the promptness, efficiency, and skill with which the personal representative performed his or her duties.
The responsibilities of a personal representative are enormous, but they can be much simpler with the assistance of an estate planning attorney.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
YOU ARE NOT OUR CLIENT UNLESS WE EXECUTE A WRITTEN AGREEMENT TO THAT EFFECT. MOREOVER, THE INFORMATION CONTAINED HEREIN IS INTENDED FOR INFORMATIONAL PURPOSES ONLY. EACH SITUATION IS HIGHLY FACT SPECIFIC AND EXCEPTIONS OFTEN EXIST TO GENERAL RULES. DO NOT RELY ON THIS INFORMATION, AS A CONSULTATION TO UNDERSTAND THE FACTS AND THE CLIENT’S NEEDS AND GOALS IS NECESSARY. ULTIMATELY WE MUST BE RETAINED TO PROVIDE LEGAL ADVICE AND REPRESENTATION. THIS INFORMATION IS PROVIDED AS A COURTESY AND, ACCORDINGLY, DOES NOT CONSTITUTE LEGAL ADVICE.