When a person dies, his assets and debts must be settled and properly distributed. Unless the decedent used a trust, his estate must undergo the probate process. The process varies by state. One important actor in the process is the executor — or personal representative. He acts on behalf of the estate. He may receive compensation for his services, but in some instances he may work free of charge.
Executors may receive compensation for their services. In general, state probate laws govern the amount. Many states follow the Uniform Probate Code's suggestion that executors receive "fair and reasonable" compensation. The definition of fair and reasonable may vary. Factors include the size of the estate and the relative complexity of its administration. Fee schedules are also common. According to an article on the website Bankrate.com, courts usually establish a fee equal to 3 percent of the value of the estate. An executor of an estate worth $100,000, for example, would receive $3,000 under such a determination.
Other factors may modify an executor's payment. The decedent could describe what compensation, if any, his executor should receive. In addition, the executor may refuse compensation. According to Nolo, most people serve as executor to honor the decedent and do not expect compensation. Close friends and family of the decedent are usually willing to serve free.
An executor's job is not easy. The executor handles matters such as finding the decedent's will, filing the will and death certificate with the court, notifying the heirs and beneficiaries, paying the decedent's death and filing tax returns. Financial responsibility, honesty, integrity and a willingness to work with the court, beneficiaries and creditors of the decedent are required. Before agreeing to render services without compensation, a potential executor should understand the gravity and difficulty of handling the administrative matters.
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Court-determined executor compensation varies by state. The exact amount depends on the facts and circumstances of each case. The court may require the executor to acquire an executor bond, which helps protect the estate from an executor's negligent or wrongful actions.
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The content of this article does not constitute legal advice. Anyone faced with the task of choosing an executor, trying to decide whether to act as an executor, or seeking information about individual probate matters in general should seek the counsel of an attorney.