When it comes to payment of a personal representative (also known as an executor), the Washington statute is pretty simple. Personal representatives are entitled to receive a fee that is “reasonable and just.” Wash. Rev. Code § 11.48.210. The probate court will determine if a requested fee is reasonable. Typically the court will approve the fee request submitted by the personal representative unless an interested party such as a beneficiary or heir objects. Note that in Washington, the Superior Court has jurisdiction over estate matters.
When drafting their will, testators generally name the person who they would like to serve as their personal representative, such as a spouse, child, sibling, friend, or attorney. They may also include a term that specifies the amount of compensation that person is to receive. If so, what the wills states would be controlling. Wash. Rev. Code § 11.48.210. Some testators include a specific dollar amount, while others state the amount of compensation is to be based on the value of assets in their probate estate
If the personal representative is not happy with the compensation provided in the will, they do not have to accept it. They can renounce it. Renouncing means that they reject it. The law requires that in order to be effective, they must renounce by submitting a Renunciation of Compensation Specified in Will form with the probate court. The form must be submitted prior to the personal representative being formally appointed by the court.
If the decedent did not have a will, the will did not provide for compensation, or the personal representative rejects the will-based compensation, the Washington Code provides that they are entitled to compensation that is just and reasonable as determined by the court. Wash. Rev. Code § 11.48.210.
The phrase “just and reasonable” is very vague. Generally, the personal representative will charge an hourly fee and keep track of their hours. Here are factors that the court may consider.
- Time. The court will look at the length of time the personal presentative has had to work. It stands to reason that the more time the personal representative has had to spend on the estate, the more compensation they should receive.
- Size of estate. The court will look at the value of the assets in an estate. Generally speaking, estates with few assets tend to take less time to settle and tend to have fewer complications.
- Litigation. If there is litigation during the process, the court will take into consideration the additional time and work involved. The types of litigation that can occur during estate administration include, will contests and contested creditors claims
- Continuing decedent’s business. For the good of the estate, the judge may order the personal representative to temporarily operate the decedent’s small business until the business can be closed, sold, or transferred according to the terms of the will.
- Geographic area. The court will take into consideration what other personal representatives have been paid in a similar geographic area for working on a similar estate.
- Professional services. If the personal representative offered professional services beyond what a personal representative normally offers, the court would take that into consideration when determining compensation. Such services might include legal, accounting, or financial.
Denial of Compensation
In Washington, the probate court has the discretion to deny or provide minimal compensation if the performance of the personal representative warrants it. For example, if the personal representative fails to perform any of their duties, the court may deny compensation.
Not only does a personal representative in Washington have the right to refuse the compensation offered by the will and opt for statute-based compensation, the personal representative has the right to waive any compensation. One reason that a personal representative may make this choice is due to the tax consequences of receiving compensation since it would be taxable as personal income. Another reason is that the personal representative may feel uncomfortable being paid to manage the estate of a dear friend or family member.