Are personal representatives usually paid for their work?
It is not a requirement, but usually they are compensated. In some cases, the Will prohibits the Personal Representative for receiving compensation for their services. However, where there is no Will, or the Will is silent on this matter (or expressly allows compensation), then the Personal Representative is entitled to be compensated for their work.
Personal Representative Compensation for Ordinary Services
California Probate Code Section 10800 sets the Statutory Compensation – or Statutory Fee – allowed for Ordinary Services provided by the Personal Representative (or Executor) as follows:
(a) Subject to the provisions of this part, for ordinary services the personal representative shall receive compensation based on the value of the estate accounted for by the personal representative, as follows:
(1) Four percent on the first one hundred thousand dollars ($100,000).
(2) Three percent on the next one hundred thousand dollars ($100,000).
(3) Two percent on the next eight hundred thousand dollars ($800,000).
(4) One percent on the next nine million dollars ($9,000,000).
(5) One-half of one percent on the next fifteen million dollars ($15,000,000).
(6) For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court.
(b) For the purposes of this section, the value of the estate accounted for by the personal representative is the total amount of the appraisal value of property in the inventory, plus gains over the appraisal value on sales, plus receipts, less losses from the appraisal value on sales, without reference to encumbrances or other obligations on estate property.
Personal Representative Compensation for Extraordinary Services
So far, we have only discussed Personal Representative Compensation for Ordinary Services. Ordinary Services may be thought of as services that apply to nearly all Probate Estates. Extraordinary Services may be thought of as services that are particular to this specific Probate Estate, and exceed the scope of Ordinary Services. These are subject to Court approval.
California Probate Code Section 10801 sets for the terms by which a Personal Representative may be Compensated for Extraordinary Services.
(a) Subject to the provisions of this part, in addition to the compensation provided by Section 10800, the court may allow additional compensation for extraordinary services by the personal representative in an amount the court determines is just and reasonable.
(b) The personal representative may also employ or retain tax counsel, tax auditors, accountants, or other tax experts for the performance of any action which such persons, respectively, may lawfully perform in the computation, reporting, or making of tax returns, or in negotiations or litigation which may be necessary for the final determination and payment of taxes, and pay from the funds of the estate for such services.
All funds paid to the personal representative are subject to approval by the probate court. Additional fees may be allowed by the court in cases of unusual difficulty or extraordinary circumstances. On the other hand, if a personal representative does not perform their duties in an orderly or timely manner, the court may reduce or deny compensation and the Personal Representative may be held responsible for any damages caused.