When establishing a person in the role of executor, it’s common to have questions about how this could impact the overall assets inside your estate.
Executors are entitled to fees, and this could decrease the volume of assets available for beneficiaries after all estate payments are made.
Executor fees are in place to compensate a person serving in the role of executor for the work he or she does in managing an estate. The executor is paid out of the probate estate rather than from the beneficiaries’ pockets.
State law will dictate whether or not the executor can be paid a flat fee, a percentage of the estate, or an hourly rate. The amount of compensation depends on the state’s individual law and many states use the Uniform Probate Code with no specific amount or rates set by law. Massachusetts has adopted and adapted the Uniform Probate Code.
The probate court judge then has the responsibility of determining a reasonable amount of compensation, which can be based on a relative complexity and size of the case. In all of these situations, it’s important to select an experienced and knowledgeable executor or someone who is familiar with financial issues, and who is also comfortable serving in this role.
When beneficiaries believe that the executor has been inappropriately paid via fees or via the transfer of assets, this can lead to disputes, conflicts and challenges in the court. This can further delay the processing of your estate and can amplify conflict between a trustee and beneficiaries or an executor and beneficiaries. This is why the selection of the appropriate executor is so important to your individual case.
Talk to our Massachusetts estate planning lawyer today about executor fees.
