Taking on the role of the personal representative in a probate case is no small task. The role comes with a tremendous amount of fiduciary responsibility and task. The work is is not to be taken lightly and is indeed, WORK. You may be wondering if the personal representative, receives and compensation for their time. This is what we will explore today.
Commissions
Just a reminder, a personal representative is the person given legal authority by the courts to administer and settle the estate of a deceased party in a probate case. The personal representative is designated by the will and is called an executor or executrix depending on gender. When there is not a valid will, the personal representative is selected by the court and is called the administrator.
In North Carolina, the personal representative may receive a commission for handling the estate. If the will does not establish the amount or means by which the personal representative is compensated, or if there is no will, the Clerk of Superior Court may, in their own judgement, allow a commission of up to five percent (5%) of the estate receipts and disbursements. Things taken into consideration by the clerk are time, responsibility, challenges, and skills involved in the administrations of the estate. Other factors include fees paid by the estate for professional services performed in the normal course of administering the estate. This includes services performed by attorneys, accountants, and probate professionals such as Estate Pro Service, LLC.
Any payments made to the personal representatives are credited for as costs and expenses towards the administration. These cost will be paid out during the accounting and distribution stage. As the personal representative, be sure to petition the clerk for approval of a commission before making distribution. [G.S. 28A-23-3]. If the overall gross value of an estate is two thousand dollars ($2,000) or less, the clerk of superior court may set the commission to be received by the personal representative, collector or public administrator in an amount the clerk of superior court thinks is adequate and just.
Please note, when real property is sold to pay debts or heirs, the commission only calculated by the proceeds actually applied in the payment of debts or heirs.
The clerk of superior court may allow the personal representative to receive commissions from time to time while the probate case is still open, however the total commissions allowed will be determined on final settlement of the estate and can not exceed the limit fixed in this section.
No Commission if…
Please note, that the personal representative who has been guilty of default or misconduct in the execution of the personal representative’s, duties that result in the revocation of the appointment of the personal representative shall be entitled to any commission under the provisions of this section.
If the will stipulates
In some cases, the commission will be determined by the will if the decedent’s will specifies a specific amount or means or standard for determining the compensation for the services rendered by the personal representative. This includes having a provision in the will that states that the compensation of the personal representative is to be determined by applying the personal representative’s regularly adopted schedule of compensation in effect at the time of performance of those services. The same situation applies if the testator’s will states that the personal representative is to receive “reasonable compensation” for those services or similar language to that effect if the personal representative and the beneficiaries whose shares would be charged with the payment of the personal representative’s compensation consent in writing to the specific amount that is deemed reasonable compensation.
There are many stipulations to consider and seeking legal counsel and probate support is important. Contact us at 919-341-1992 for a free consultation to see how we can help you make the process easier.