The short answer is: Usually – but not always.
The personal representative is generally entitled to be compensated for the services rendered in administering the estate of a decedent (the person who has passed from this life). Specifically, section 3537 of the Pennsylvania Probate, Estates and Fiduciaries (PEF) Code states the general rule that: “The Court shall allow such compensation to the personal representative as shall in the circumstances be reasonable and just, and may calculate such compensation on a graduated percentage.”
How much is “Reasonable?”
Five percent of the gross taxable estate is the general guideline as to what compensation is “reasonable” under the PEF code standards and to the Pennsylvania Department of Revenue. For example, if the gross taxable estate is one hundred thousand dollars ($100,000.00), the five percent executor commission could be five thousand dollars ($5,000.00). However, this is not a hard or bright-line rule; but instead, merely the starting point of the discussion because all executor and administrative fees are subject to the review and approval of the Court. Moreover, the Pennsylvania Department of Revenue can disallow some expenses if they feel the executor or administrator has charged too much for providing certain services or the Department disagrees with the Executor’s assessment.
Therefore, it is always wise for an Executor or Administrator to keep scrupulous and thorough records of any time and energy spent on each estate related task. At Covalt Law, we spend a great deal of time with our clients who are also named executors or administrators of another person’s Last Will & Testament in order to emphasize this point and check up on their journal/time keeping obligations. This is also another reason why when our clients engage in their own estate planning, we remind them of the important characteristics of an executor and what they should look for when selecting their own. To learn more about choosing the best Executor to administer your affairs, please see our previous blog post, The Five Ideal Characteristics your Executor Needs.
When won’t an Executor be Paid?
There is always a chance that an Executor will not be paid. This occurs if/when the decedent (the person who passed from this life) included a clause in their Last Will & Testament stating that the Executor “shall serve without compensation” or something similar to convey lack of payment for their services.
Executors should also be wary of accepting the task in the hopes that this can change because there is precedent (meaning other cases) in the Commonwealth which state the Executor will be bound by this lack of compensation provision in the decedent’s Last Will and Testament if they accept the duty of Executor, take their oath before the Register of Wills and receive the grant of Letters Testamentary.
If you have questions about your duties as an executor, feel free to reach out to Covalt Law at your convenience; we’d be happy to provide you an overview of what to expect as Executor during your initial consultation meeting with Attorney Covalt.
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