The executor of an estate is normally named in a valid will, appointed by the overseeing probate court, and is generally a family member or friend of the deceased. A lawyer or other professional can also be named as an executor. An executor is responsible for paying the deceased’s debts and distributing the estate assets in the manner described in the will. He may also need to hire others, such as appraisers, to help him value or sell assets in the estate. These services are also paid for by the estate. An executor can be paid for his services, but he is not compensated directly by the beneficiaries. The estate pays for the executor’s services, which diminishes the amount of assets the beneficiaries get.
List all of the expenses you have incurred and all the time you have spent as an executor. Record all information on the date you incurred the charge or did the work. Keep any other supporting documents, such as invoices, as well.
Read More: How Much Do I Pay an Executor of a Will?
Keep a copy of the estate accounting that defines the total value of the estate. Early on in the probate process, you will be required to inventory the assets that are included in the probate estate and determine its overall value. The value and composition of the estate will be an important component in determining your fee.
Review the will to determine if it comments on the executor’s compensation. Some wills may define how much an executor can receive for performing their responsibilities, either as a flat fee or at an hourly rate for is work. It can also state that the executor is to receive no compensation for his work.
Read the probate code of the state where the estate is located to determine how much it requires estates to pay executors. This is only relevant if the will does not provide how much an executor is paid. Some states, such as Kentucky, will pay the executor a percentage of the estate’s total assets. A few jurisdictions, such as California, have a fee schedule that pays executors a flat fee based on the estate's total value. States that have adopted the Uniform Probate Code, such as Arizona, determine executor fees based on a “fairness” standard. In these cases, the executor’s fees are based on the work done by the executor and the size and composition of the estate.
Consider whether you want to renounce will provisions regarding compensation. If you did not formally agree to terms of the compensation prior to deceased’s death, some states allow you to renounce the part of the will regarding compensation. Instead, you can either claim fees permitted under the appropriate probate code or you can waive your rights to any fees. The second option is generally used by executors who also happen to be the sole beneficiary of the will or a close relative of the deceased.
Prepare a letter renouncing the payment provision of the will if you want to be paid according to another standard. The letter, which should be dated and signed by you, should clearly define whether you want to be paid based on the state’s probate code or not be paid at all. Submit this letter to the overseeing court.
Petition the overseeing court to approve the payment of fees to you once the estate is almost prepared to be closed. Estate expenses need to be approved. Prepare the petition for payment and attach your documentary evidence demonstrating the work you have done. Ask for the appropriate fee based on the deceased’s will or the state’s probate code. If the state has adopted the UPC, ask for “reasonable compensation based on the service provided to the estate.” Generally, the court should then approve the fee and authorize you to pay yourself using the estate’s assets.
John Cromwell specializes in financial, legal and small business issues. Cromwell holds a bachelor's and master's degree in accounting, as well as a Juris Doctor. He is currently a co-founder of two businesses.