Dealing with the estate of a deceased person requires the appointment of a personal representative. This representative may be an executor of a will, the trustee of a trust, or an administrator appointed by a court. Attorneys at Clear Counsel Law Group frequently encounter questions concerning how much these individuals are compensated for their work and who pays that bill.
Role of a Personal Representative
When someone passes away, a personal representative is appointed to handle the deceased’s estate. This role can vary in complexity and workload, ranging from simple tasks like closing bank accounts to more involved duties like cleaning out properties or notifying creditors. The most common duties include contacting beneficiaries, assessing assets, distributing assets, and notifying creditors.
Each estate, however, is different and the workload can shift dramatically with the size and complexity of an estate.
Compensation for Personal Representatives
In Nevada, there are two primary fee categories that personal representatives draw from to be compensated for their work:
Statutory Fees
As the name suggests, these fees are allotted by state statutes. They change over time, compensating for rising inflation, types of assets, and the scope of technology involved in completing the distribution of an estate.
These fees are determined as a percentage of the overall value of the estate. As of this writing, the fees broke down to 4% up to $15,000 worth of estate, 3% on the subsequent value up to $100,000, and another 2% for any value beyond. This percentage is both about the value of the estate and the changing categories of probate a representative must go through. Estates over $100,000 must go through the full probate process whether that be summary administration (for less than $300,000) or general administration (for those over $300,000).
Because the percentages are already small, future changes will likely be to the limits of each tier.
Extraordinary Work
Not all estates can be handled in a straightforward process from a desk with a phone and some time. Occasionally the work takes on extra dimensions and is compensated accordingly.
- Beyond Ordinary Duties: If the personal representative’s duties extend beyond the standard requirements, such as dealing with extensive property clean-outs or handling multiple storage units, they may be entitled to additional compensation.
- Fair and Reasonable Evaluation: The court assesses what is fair and reasonable compensation for this extraordinary work, considering the extra effort and time invested.
The extra compensation for extraordinary work is difficult to estimate as it is dependent on the work.
Who Pays?
A will or trust may contain language expressly instructing payment to the personal representative. This language can leave any amount to the personal representative. The representative has the option to take what is instructed or can decline to receive that payment. They are then entitled to the fee structure according to statute.
Compensation to a personal representative is built in to the estate law to keep systems from bogging down. If they system was strictly voluntary it could create a burden to executors and administrators that could result in complications. For those who see their role as a gift or obligation to the estate, keep in mind a personal representative can decline all payments and receive nothing in compensation
Seeking Fair Compensation
If you are listed as a personal representative in a will or trust, it’s important to understand the scope of your responsibilities and the associated compensation. Should your duties extend beyond ordinary tasks, you may be eligible for additional compensation to reflect that extra work.
Seeking additional payment for extraordinary work requires the court’s approval.
Overseeing the Probate Process
- Legal Support: Handling an estate, especially a complex one, can be challenging. A personal representative can seek legal assistance from a probate attorney to provide guidance and support throughout the process. Fees paid to attorneys come from the estate and are not paid by the representative.
- Advocating for Fair Compensation: A legal professional can help ensure you are fairly compensated for your efforts, particularly when your duties require significantly more work than is typical for an estate of the same value/size.
Acting as a personal representative is a significant responsibility that often goes beyond basic estate administration. Understanding how compensation is determined helps you to seek fair pay for your work in this role. If you find yourself appointed as a personal representative and need assistance completing the probate reach out to Clear Counsel Law Group. Our team is committed to ensuring that personal representatives are adequately prepared for their role and properly compensated for their contributions to settling an estate.