It’s a lot of work to close out an estate, especially one with a lot of assets. Things can get complicated or even last for months or years as a time. Since it all begins with the executor collecting information about the estate and this alone can be complex or require some time, executors get paid for the work that they do. Read on to learn more about how executors can get paid for their work and what’s allowable under California law under CA Prob Code § 10800.
A California executor compensation lawyer can assist you if you believe that you have questions around the prospect of executor compensation. The process of serving as a personal representative, otherwise known as an executor in an estate, can be a very time consuming task that means you are entitled to be paid for your work. However, this does not mean it is open season for the executor appointed in a California case to charge anything they want in this process.
The will of the deceased party might specify exactly how compensation for an executor should be calculated. But if the will does not specify this amount, then the executor needs to follow California executor compensation rules. You might hear several different terms used to refer to this party. This includes personal representative and executor, both of which serve the same role in the closing out of an estate. The courts and states recognize that it can be a very involved task to serve as a personal representative or executor because it can take a lot of time and also significant organizational skills on the apart of the executor. This means that it is essential for the person who has been appointed in this role understand the role that they are playing and their responsibilities to the estate but also to be fairly compensated for the work they put in in closing out the formal estate. Since it is likely that you’ll have many different questions as an appointed executor, it is best to proceed with the support of a California executor compensation lawyer as you decide your next steps.
Will Compensation Basics
Compensation that is specified in a will can only be changed in California if the court grants an executor’s petition to therefore be relieved to those provisions and all affected parties must agree that it is not enough by itself to decrease or increase that amount. In general, the overall valuation of the estate dictates how much the executor can receive in terms of compensation. This is based on California law. An executor is entitled to receive:
- 4% of the first $100k in assets.
- 3% on the next $100k in assets.
- 2% on the next $800k in assets.
- 1% on the next $9 million.
- 0.5% on the next $15 million.
- A court determined reasonable amount for all amounts greater than $25 million.
In all of these circumstances, the support of an executor compensation attorney in California can be helpful for understanding the rules. Assets that have named beneficiaries, such as life insurance policies or IRAs are not included in these calculations. If there are two or more executors, the fee should be divided among the executors based on the services that were rendered by each party or as agreed by the executors.
The court can also allow an executor in California to be compensated beyond these means or extraordinary services, such as having to run a business, managing ongoing litigation, handling tax audits, preparing tax returns on their own, overseeing the lease or sale of real estate, and more. This is outlined under California Rules of Court 7.703. The gross value of all of the assets inside the estate is used to determine the overall estate value and therefore, the fees that an executor is entitled to receive.
The fee schedule in California determines the basic payment available to a California executor but this does not include any of the extraordinary services listed above. If you have more questions about the process of serving as an executor or how to choose the right party to serve as the executor of your estate, schedule a consultation with an executor compensation attorney serving California.