Do I Get Paid to Serve as an Executor, Trustee, or Agent?
Yes, but depending on the role that you are in, the amount of compensation and the calculation thereof will vary.
A. Compensation of an Executor / Administrator.
In California, the compensation for the personal representative and compensation for the attorney for the personal representative are set by statute. The ordinary compensation calculation is based on the value of the assets of the estate multiplied by staggered percentage rates which decrease as the value of the estate increases. The value of the estate for purposes of ordinary compensation (the compensation base) is determined by taking the appraised value of the assets and adding any receipts (income) plus any gains from the sales of assets (sale price – appraised value), and subtracting any losses from the sales of assets (appraised value – sale price). The appraised value of the assets is determined by the personal representative for cash assets and by a court appointed probate referee for non-cash assets. An illustration of this is as follows:
Appraised Value of Assets
+Gains on Sale
-Losses on Sale
The California Probate Code also provides that both the personal representative and his or her attorney may receive additional compensation for extraordinary services in an amount allowed by the court as it deems just and reasonable. Effectively, this turns into a reasonableness calculation based on the circumstances.
For a personal representative, extraordinary services may include selling or managing real or personal property, business management, tax return preparation, or handling audits or litigation of the estate.
For the personal representative's attorney, extraordinary services may include a variety of other services, typically for issues that require the assistance of legal counsel such as selling assets, litigation, or out-of-state administration.
B. Compensation of a Trustee.
A trustee's compensation depends on what the trust says the compensation will be. If the trust has a provision that says what compensation the trustee is entitled to, then the trustee is entitled to that compensation. The court may always fix a greater or lesser amount of compensation and there are standards for this as well.
If the trust does not have a provision, then the California Probate Code simply provides that a trustee is entitled to "reasonable compensation under the circumstances", which varies on a case-by-case basis.
Usually, the trust just says the trustee is entitled to "reasonable compensation" and provides no further guidance for how that is calculated. The issue of reasonable compensation is discussed in much greater detail in What is Reasonable Compensation?.
C. Compensation of an Agent Under a Power of Attorney.
For an agent under a Power of Attorney, the compensation is usually reasonable compensation, which depends on a number of different issues. The power of attorney itself could state what compensation is reasonable or set some other calculation for reasonable compensation, and if it does, that is the compensation of the agent. Typically, however, if compensation is referenced at all, it merely states reasonable compensation.
You may also be interested in:
- Can I Hire an Attorney as an Executor, Trustee, or Agent?
- How Much Does Probate Administration Cost?
- How Much Does Trust Administration Cost?
- What is a Probate?
- What is Probate Administration?
- What is Reasonable Compensation?
- What is Small Estate Administration?
- What is Trust Administration?
- Why Does Trust and Estate Administration Exist?
- Can I Recover My Attorney's Fees?