Serving as executor, or personal representative (PR) as they are now called in Massachusetts, of someone’s estate can be a time consuming job. It involves inventorying the estate, locating and marshaling the assets, filing tax returns, meetings with attorneys or accountants, fielding questions from heirs and making distributions. Even in an uncomplicated case it can take some time. As a probate attorney in Hingham, I am often asked by my clients if they can get paid for this work.
In some states, the executor receives a set percentage of the estate. That is not the case in Massachusetts. In Massachusetts an executor, and for these purposes we mean an executor who is not an attorney, is entitled to “reasonable compensation.” What does this mean?
First, it means that any executor wishing to be paid needs to keep detailed, contemporaneous records of the work they did. They cannot just cut themselves a check at the end of the process. They need to have records showing the dates, amount of time spent, and what the time was spent on. For instance “April 2, 2011 – Visit to bank to retrieve records, meeting with accountant to review statements for upcoming taxes – 4 hours” is a lot more acceptable than “April 2, 2011 – 4 hours.”
The records have to be contemporaneous – meaning they have to be kept at the time the services are rendered. And the services have to be “reasonably necessary” which means an executor probably couldn’t get paid for time spent visiting the grave of the deceased, as this is not a duty of the executor.
And the fees must be “reasonable.” This means that they must reflect what a reasonable person would charge for these services. So charging $100/hour to drive by the decedent’s house to check on it would probably not be considered reasonable. $25/hour for this task probably would be considered reasonable. Likewise, charging $40/hour for bookkeeping may be seen as reasonable if this is the going rate for bookkeeping in the area.
The beneficiaries of the estate or the Court can object to the proposed fees and lower them if they deem them unreasonable. For this reason, the more clear your records can be, the better.
Keep in mind that income earned as an executor is taxable. And that a person can decline to be compensated for this work if they wish.