Estate Administration: How Executors & Personal Representatives Get Paid
Losing a loved one is undoubtedly one of life’s most difficult challenges, and estate administration can add to that stress. The good news is that in most cases, whether through specific provisions in the will or state laws, executors (now known as personal representatives in Minnesota) are entitled to compensation for their time and efforts.
The exact amount can vary depending on the circumstances, but the payment comes from the probate estate itself. These fees compensate you for the time and energy you put into handling the decedent’s affairs, and they can be calculated as a percentage of the estate, a flat fee, or an hourly rate.
Why Does an Executor Get Paid?
Being named executor of an estate is a huge responsibility, and it’s essential to understand your duties and responsibilities.
As your loved one’s estate manager, you are responsible for:
- Initiating probate proceedings by filing a petition with the court
- Locating their assets, which may involve a thorough investigation
- Providing notification to heirs, interested parties, and creditors
- Managing the administration of the estate, such as making mortgage payments, closing credit cards, and notifying the Social Security Administration
- Identifying and settling the deceased person’s debts using the estate’s funds
- Distributing the assets to the designated beneficiaries
- Concluding the estate by notifying the court
Being an executor or personal representative is no easy feat. It can feel like having a second full-time job. There are countless responsibilities to manage, and it can be overwhelming. That’s why it’s important for executors and personal representatives to be compensated for their hard work with a fee. It’s a way to acknowledge and show appreciation for the significant time and energy they put into their duties.
How Much Does an Executor Get Paid?
In Minnesota, payment can vary based on provisions in the will, the state’s laws regarding estate administration, and the preferences of the executor and beneficiaries.
When a Valid Will Specifies Payment
When a valid will explicitly states the compensation for the executor, the payment is determined according to the testator’s (the person who created the will) wishes. Some testators may specify a flat fee for the executor’s services, while others may request that the executor receive no compensation.
On the other hand, some may provide an inheritance to the executor instead of a fee as a non-taxable gift. The probate courts typically uphold these provisions. However, in Minnesota, executors may renounce these provisions, denying compensation or asking for adequate payment.
When There is No Will or Specified Payment
In cases where there is no valid will or the will does not mention executor compensation, the probate court follows state law to determine the payment. In Minnesota, the court typically establishes “reasonable” payment for time spent by the hour. Under the Uniform Probate Code, the judge determines a “reasonable” compensation based on the complexity and size of the estate, taking into account the executor’s workload. In Minnesota, the court typically establishes “reasonable” payment by the hour, based on time spent.
When There Are Multiple Executors
If a will designates multiple executors but does not specify their payment, state law determines how the compensation is divided among them. In Minnesota, payment will typically be spent based on time spent by each executor.
When The Executor is an Institution
When a will designates an institution, such as a bank or trust company, as the executor, their payment is determined based on the institution’s fee schedule. These institutions typically have predefined fee structures that outline the compensation they receive for acting as the estate’s representative.
When Does an Executor Get Paid?
An executor typically gets paid for their services after completing the probate process, and the estate’s assets have been distributed. The timing may vary depending on the complexity of the estate, the involvement of any legal proceedings, and the provisions outlined in the will or determined by state law.
It’s important to keep track of your time and expenses and to consult with an estate planning attorney to ensure proper documentation and adherence to legal requirements for receiving compensation.
Schedule a Call to Discuss Estate Administration Costs and Retainers
Executors have an important role in estate administration, and it’s crucial to know your rights regarding payment for the work you do.
If you are unsure about how much you’re entitled to, concerned about liability and following state law, or if there has been any delay in receiving payment, don’t hesitate to seek legal advice.
When you have an informational call with our team at Safe Harbor Estate Law, they will quote you a beginning retainer amount for your matter based on how much work we foresee will be needed at the very beginning. Estate administration cases are billed hourly due to various assets, family dynamics, and other factors.
Retainers can range from $1,000 to $10,000, depending on the complexity of the case. Typically, simple probate starts at $5,000 in total legal fees, going up in cost from there.
You can schedule a call with our intake specialist to learn more about what costs may look like for you.