When someone passes away, their estate must be settled and assets distributed. While close relatives such as the decedent’s spouse or children may be tempted to take it upon themselves to distribute the decedent’s belongings and otherwise take care of any outstanding business, the law requires a more formal, structured process. The person who is responsible for managing a decedent’s estate through the estate administration process is a personal representative, also referred to as the executor, who must be appointed by the probate court. In Nebraska the County Court has jurisdiction over estate matters.
Personal Representative Compensation
Contrary to what some believe, personal representatives do get paid for their work—even if the personal representative is a relative. Managing an estate can involve a lot of detailed, complicated work, especially if the estate is large, has many beneficiaries, or has complex assets.
Nebraska law allows for compensation either based on what the decedent provided in their will or based on what the court determines is reasonable. Neb. Rev. Stat. § 30-2480. In determining what is “reasonable,” some of the factors that they court may consider include:
- Nature of the work involved: The court will look at the amount of time the personal representative spent working on estate issues as well as the difficulty of the tasks and skill involved.
- Compensation customarily charged. The court will look at the amount of compensation that is generally paid for work on estates of similar size and complexity in the same or similar geographic area.
- Size of the estate. The court will look at the size of the estate as large estates tend to require more work and more skill.
- Experience and capabilities of the person. The court will look at the skill and experience of the personal representative and will approve compensation to the personal representative that is consistent with their experience.
Responsibilities of the Personal Representative
The following are the some of the tasks that a personal representative will be required to complete during the administration process. Their compensation will be based on completing these and other tasks that are necessary to close the decedent’s estate.
- Identifying estate assets. The personal representative must figure out what property is in the estate and safeguard it. Property may include personal property, real estate, business interests, and financial accounts.
- Inventorying assets. The personal representative must create an inventory of estate assets that includes a description of the items and their date-of-death value. This may require getting professional appraisals of certain assets. Neb. Rev. Stat. § 30-2467
- Notifying creditors. An important part of the estate administration process is paying estate debt, including unpaid bills that the decedent left behind. In order for creditors to get paid, they must follow a procedure that starts with the personal representative publishing a notice.
- Pay debts and expenses. Based on claims filed, the personal representative must pay the decedent’s debts. The personal representative must pay only valid debts and must pay them based on the statutory order of priority. In addition to debts owed by the decedent at the time of their death, the decedent must also pay expenses related to the administration of the estate. This may include court fees, appraisal fees, and compensation for professional services such as for attorneys and accountants. Expenses that must be paid from the estate also include compensation to the personal representative.
- Filing tax returns. The personal representative must file the decedent’s last personal federal and state tax returns as well as any tax returns required to be filed on behalf of the estate.
- Distributing assets. The final major step in the administration process is to distribute assets. The personal representative is responsible for making sure that assets are distributed based on the decedent’s will or on Nebraska’s law of intestate succession.
Note that while the personal representative is responsible for making sure that the tasks necessary to settle an estate are completed, all actions by the personal representative are subject to review and approval by the County Court.