Being the executor of an estate can be a time-consuming and involved task. Executors may be responsible for probating the decedent’s will, selling the decedent’s assets, paying the decedent’s outstanding debts, paying the decedent’s taxes, providing an inventory and accounting to the court and beneficiaries, and dealing with factious family members and making distributions to the beneficiaries, among other duties.
With all the tasks and time involved in being an executor, it is understandable that some executors desire to be compensated for their work and time. If all beneficiaries agree to the executor’s compensation, the court will not need to rule on the executor’s compensation. If, however, all beneficiaries do not consent to the executor’s compensation, the executor may move the court to approve the executor’s reasonable compensation. The probate court will look at many factors to make its determination including the court’s local rules, if any, addressing executor compensation.
Should the beneficiaries agree to executor compensation, the executor may need to provide an informal accounting or asset disclosure to the beneficiaries. Transparency in estate administration generally smooths relationships with the estate beneficiaries and makes obtaining beneficiary consent for executor compensation easier. Disclosing the estate assets and transactions to beneficiaries can ease the beneficiaries’ suspicions towards the executor and help reduce the impact of negative long-standing family dynamics on the estate administration. If ultimately the beneficiaries do not consent to compensation, then an executor must move for court approval of executor’s fees.
In Tennessee, corporate fiduciaries may generally charge their normal fee schedules which oftentimes are calculated as a percentage of estate assets while other professionals typically may charge reasonable hourly rates. Depending on the nature of the estate and the relationship among the beneficiaries, a corporate fiduciary or professional can be well worth the fee. But a corporate fiduciary or professional is not right for every situation, so it is wise to discuss your specific circumstances with your estate planning attorney when drafting the initial documents.
Many executors waive compensation if they are serving as executor of a parent’s estate, are the sole beneficiary of the estate, are the surviving spouse, or for many other reasons. Whether the executor has waived compensation or charges an hourly rate, executors are allowed reimbursement for costs of estate administration that the executor has fronted.