One of the most common questions about the role of a personal representative (aka executor or estate administrator) is whether they are paid. Yes, they are paid. A personal representative is the person or entity appointed by the court to settle the estate of a decedent during the administration process. A personal representative must be appointed, and a decedent’s estate is required to go through an administration process regardless of whether the decedent left a will or was intestate. Note that because of the legalities and complexities involved with the administration process, personal representatives should seek the guidance of an experienced Maryland executor commission lawyer.
Personal Representative Duties and Responsibilities in Maryland
The personal representative’s work begins after the approval of their petition to be appointed. One of the first tasks of the personal representative is to identify estate assets. They also must secure the assets, appraise them, and create an inventory. Only assets that are part of the decedent’s probate estate are subject to the estate administration process and the personal representative’s control.
Next, the personal representative must pay estate debts and expenses. To get paid, creditors must file claims within the official claims period. Only claims that are timely filed and that are valid will get paid and only to the extent that there are sufficient funds in the estate. The personal representative is not required to pay estate debt out of their personal funds. If the estate is short on funds, then the personal representative will pay them based on a statutory order of priority. There are issues that will result from an insolvent estate, contact an experienced Maryland executor commission lawyer to discuss.
Finally, the personal representative is required to distribute assets to the decedent’s beneficiaries or heirs according to the decedent’s will or Maryland’s law of intestate succession. The entire administration process generally takes at least 7-10 months and can last much longer if the will is contested or if there are other complications.
Amount of Compensation for a Maryland Personal Representative
Maryland law provides that personal representatives are entitled to receive “reasonable” compensation for their work. Md. Code, Est. & Trusts § 7-601. While the statute does not specifically define reasonable, it does provide a formula for determining the maximum amount of compensation that a personal representative may receive, based on the value of the estate’s probate assets.
The total amount of the personal representative’s compensation cannot exceed the following percentages of the estate’s value:
- 9.0% on the first $20,000
- 3.6% on anything more
Example 1: The decedent’s estate is worth $20,000, the personal representative would receive a fee of $1,800. $20,000 x 9% = $1,800
Example 2: The decedent’s estate is worth $200,000, the personal representative would receive a fee of $8,280. ($20,000 x 9% = $1,800) + ($180,000 x 3.6% = $6,480) = $8,280
As an experienced executor commission attorney in Maryland will explain, despite the statutory framework, the first place to look to determine the amount of compensation to which a personal representative is entitled is the decedent’s will. When making a will, a testator exerts a great deal of control over what happens to their estate upon their death. This includes nominating the personal representative as well as setting the amount of their compensation. For example, the testator can provide a flat fee or a fee based on the value of the estate’s assets.
However, if the amount that the personal representative would be entitled to under statute is greater than what the will provides, than the personal representative would be entitled to the greater amount. Similarly, the court is not required to approve a maximum fee. If the circumstances warrant it, the court can approve a lower fee. Factors that the court might consider in determining the fee to which a personal representative would be entitled include the amount of time spent, the personal representative’s amount of experience and level of skill, the size and complexity of the estate, and whether there were complications such as a will contest or other probate disputes.
Note that the personal representative is not required to accept a fee or the full amount of the fee to which they would be entitled. In addition, if they believe they are entitled to a greater fee than approved, they have the right to appeal. An experienced executor commission attorney serving Maryland should be consulted to help prepare commission request.