In Maryland, executors, also known as personal representatives, have the right to receive "reasonable compensation" for their estate administration work, which can be time-consuming and challenging. The testator's will may state a fee for the executor, but if the court deems that amount inadequate, it can grant the executor additional funds.
Maryland also has a formula based on the value of an estate for what it considers adequate executor compensation.
Maryland Executor Payment for Administration of the Estate
Being an executor is a demanding job, requiring a considerable amount of time and effort. A person who accepts the position has a fiduciary duty to serve the beneficiaries' interests over their own. The estate executor is eligible to receive compensation for managing the decedent's estate.
According to state law, payment to an executor should be "reasonable," but not exceed certain amounts. Calculations are made before debts or obligations of the estate:
- 9 percent on the first $20,000 of estate assets.
- 3.6 percent, plus $1,800 for an estate value of over $20,000.
For example, if an estate is worth $10,000, the executor's payment will be about $900, but if the value of the estate is $1 million, the executor's fees would be roughly $37,080. Funds that pass directly to beneficiaries are not included in executor fee calculations.
Court Has the Ability to Vary Executor Fees
A will may state a desired payment for the executor, but if a Maryland probate court believes it is inadequate, it may grant the executor additional monies subject to the limitations listed above. An executor who is an estate's sole beneficiary may wish to waive the executor fees, as they are taxable income in Maryland, but the inheritance is not.
Duties of a Maryland Executor
An executor of an estate has many duties, including:
- Filing the will in probate court.
- Opening the estate's bank account.
- Notifying creditors of the decedent's passing.
- Listing or inventorying the decedent's assets and having them appraised.
- Selling assets if applicable.
- Collecting rent if the decedent owned real estate.
- Representing the estate regarding any legal matters, including lawsuits.
Once the creditors' claims have been paid, the executor can begin to close the estate. At this point, they can distribute the remaining assets to the designated beneficiaries and file a petition to close the estate. When they complete their tasks, the court will approve the closing petition and release the executor from their duties.
Requirements to Be an Executor
The decedent may have chosen a particular individual to be their executor because they have a professional background that gives them some experience, or because they are simply trustworthy.
To be an executor of a Maryland estate, an individual must be at least 18 years old and of sound mind. The probate court will reject a person who is a full-time judge of any state or federal court, a court clerk, or a registrar unless that person is a surviving relative with a third-degree kinship to the deceased or a spouse.
Executors in Maryland must be U.S. citizens or permanent residents unless they are the decedent's ancestor, descendant, spouse or sibling. The state does not allow anyone to be an executor with a serious criminal conviction unless they can demonstrate good reason to serve.
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.