Personal Representative Fees Calculation
How To Calculate Personal Representative Fees
Serving as a Personal Representative (also known as Executor or Administrator) of an Estate is not an easy job. The individual who accepts this job is required to send notices to beneficiaries, manage assets, pay expenses, settle all debts, and file tax returns.
The question then becomes: How much can this person be paid for this job?
Unlike some other states, Pennsylvania does not have a specific statute that establishes Personal Representative fees. Instead, Pennsylvania law (specifically, 20 Pa.C.S.A. §3537) provides that a court shall allow compensation to a Personal Representative that is deemed to be reasonable and just considering the specific circumstances and that the court may calculate such compensation on a graduated percentage.
A Pennsylvania case (Johnson Estate), decided by Judge Wood of Chester County Orphans’ Court in 1983, has been utilized by many attorneys to estimate reasonable Personal Representative fees. The decision of the case includes a schedule, per below, to calculate the fee. According to Judge Wood, this is a schedule provided by the Pennsylvania Office of Attorney General. Attorney General has denied that it ever provided an approved fee schedule.
|Estate Value||Per Col.||Per Total|
|1%||Joint Accounts||1%||POD Bonds||1%||Trust Funds|
|3%||Real Estate Converted with Aid of Broker||5%||Real Estate: Non-Converted||1%||Real Estate: Specific Devise|
In 1994, Judge Young of Lehigh County Orphans’ Court, issued a statement regarding the guidelines for fees of lawyers and fiduciaries (such as Personal Representatives and Trustees). The statement contains guideline fee schedules. The statement concludes that the calculations are only a guide, and that the circumstances of each matter must ultimately dictate an appropriate fee.
Guideline Executor’s Commission (Lehigh County)
- 6% of the first $100,000 ($6,000)
- 5.5% of next $200,000 ($11,000)
- 5% of next $200,000 ($10,000)
- 4% of next $200,000 ($8,000)
- 3% of next $300,000 ($9,000)
- 2% of next $500,000 ($10,000)
- 1.5% of next $500,000 ($7,500)
- 1% of next $1,000,000* ($10,000)
- 6% of income
*Over $3,000,000, additional charges on the basis of services rendered, degree of responsibility assumed, and other relevant factors, will be subject to Court approval.
Personal Representatives should be encouraged to keep detailed records of their activities to justify any fee that they may charge to the Estate. These records include time logs. Although this creates an administrative headache, those detailed records may persuade a judge to approve the fee that the Personal Representative deems to be reasonable, and the records may convince discontent beneficiaries that they should not expend any time or cost with a trial that they may lose.Lawyers, Personal Representatives, and beneficiaries have often relied upon these guidelines to either support or challenge a Personal Representative’s compensation. The courts evaluate these guidelines when a Personal Representative’s compensation is challenged; however, the court ultimately reviews all facts and circumstances to determine a reasonable fee for the Personal Representative.
On the other hand, beneficiaries should be encouraged to be patient before challenging any fee that a Personal Representative may charge against the Estate. Until the administration of the Estate is near completion, it will be difficult for anyone to determine a fee that will be considered reasonable by a court.
Attorney R. Nicholas Nanovic counsels families in the administration of estates including large, complex estates involving trusts and complex tax matters. Nick is a certified Accredited Estate Planner® designee by the National Association of Estate Planners and Councils.