Personal representatives are entitled to receive reasonable compensation for the work they perform in managing the administration process of an estate of a deceased person. “Fair” can be defined in two general ways. If the decedent included a term in their will describing the amount of compensation the personal representative is to receive, then the court will deem that as the fair amount. Fair compensation is also defined by the Utah Code as what is reasonable based on the quality of the services provided. Utah Code Ann. § 75-3-718. Let’s first look at the services that a personal representative is required to perform.
Duties and responsibilities of a personal representative
When someone dies, their estate must be settled. That means that all the decedent’s outstanding business must be cared for including bill payment and disposal of their property. The personal representative, also known as the executor or administrator, is responsible for managing the administration process under the supervision of the probate court. The tasks they are responsible for completing include:
- Identifying and inventorying the estate. The personal representative must identify the property that is part of the decedent’s probate estate. For some estates this may be a simple as the decedent’s home, the contents of the decedent’s home, and a bank account. For other estates it may involve multiple real estate properties, several financial accounts, several vehicles, and a vast amount of additional personal property. The personal representative must create an inventory that includes the value of the property.
- Paying debt and expenses. Any outstanding debt that the decedent left behind must be paid. Most decent leave some debt. It may be credit card bills, car loans, student loans, or tax bills. The personal representative is required to manage the creditor claim process and use estate assets to pay just debts that have been properly filed to the extend there are assets in the estate to payment. If there are limited assets, the personal representative must follow the statutory order of priority to determine which debts must be paid first. The personal representative must also pay expenses associated with administration such as court fees and appraisal fees. Note that their own executor commission is considered an expense of administration.
- Distributing assets. The final major task for the personal representative is to distribute estate assets. The decedent’s will will direct the personal representative as to who should get the various property in their estate. If the decedent died without leaving a will, then Utah’s law of intestate succession will detail how to distribute the estate.
Note that generally the court will not approve the personal representative fees until the estate has been distributed or is ready for distribution.
Will-Based Compensation
Typically, testators name who they want to service as their personal representative, also known as the executor of their estate. They can also indicate how much that person is to get paid. This amount can be zero, it can be a percentage of the estate’s assets, it can be a flat amount, or it can be some other amount as determined by the testator. Generally, the court will deem that amount reasonable. However, the personal representative is not required to accept the will-based fee. The can renounce it and opt for the statutory fee.
Statutory Compensation
Utah law is fairly open regarding personal representative compensation. The statute states that whatever fee that the personal representative request would be considered reasonable unless someone objects. In other words, the court expects that a personal representative will subject a fee that fairly represents the work completed and that they can defend.
If the fee that personal represented requests more than what is reasonable, the assumption is that an interested party such as a beneficiary or heir will object. The personal representative would then be required to show why the requested fee is reasonable based on the services rendered.