Dear Oakley,
My mother passed away last March in Fairfax. My brother, the estate executor, has been the one to navigate the estate administration process. The estate is still not completely settled 15 months later because of a time share that was not included in her trust and needs to go through probate court. Both of us signed a release of any interest in the time share. The entire estate, once settled, will be about $600,000.
My brother believes that he deserves $10,000 for his service as executor, and he just sprung this on me now. I don’t dispute that he worked very hard to settle my parents’ affairs. Honestly, I think executors should be entitled to something, but that seems a bit steep. How much should executors get compensated? Also, my brother asked me to sign a release form before he gives me any money my mother left to me minus his fee. Is that normal?
Thanks for your help!
Lotta Munney
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Dear Lotta,
Your brother has managed your mother’s estate for fifteen months and going, and given the time and stress involved in managing a person’s estate, $10,000 actually sounds quite reasonable given the fiduciary compensation guidelines in Fairfax. In Virginia, there is a specific formula for how the amount of compensation is determined.
Virginia Code § 64.2-1208 allows a “reasonable compensation” to a fiduciary for services rendered in the administration of an estate. There is no specific definition of “reasonable compensation”, but in the absence of unusual circumstances, the Office of the Commissioner of Accounts for the Circuit Court of Fairfax County, will allow a fee based upon the following:
1. Income: 5% of income receipts (not including capital gains) realized during each accounting
2. Principal: A fee based upon the inventory value, including amended inventories, of the decedent’s probate assets in accordance with the following schedule:
First $400,000.00 5%
Next $300,000.00 4%
Next $300,000.00 3%
Balance over $1,000,000.00 2%
Balance over $10,000,000.00 By agreement with the Commissioner
(prior consultation is required)
Please see this letter for more details about Fairfax. Most other jursidictions in Virginia follow the Uniform Fiduciary Fee Schedule approved by the Judicial Council of Virginia back in 2005. As a comparison, in Maryland, the law allows executors to claim a fee of 9% of the estate’s value for small estates that are less than $20,000. For larger estates – those greater than $20,000 — the executor may claim a fee of $1,800 plus an additional 3.6% of the value over $20,000 as compensation for their role in settling the estate.
Should You Sign a Release Form?
Signing release forms at the end of this process is also pretty standard, but your brother needs to be transparent with all the transactions related to your mother’s estate. Have a probate attorney of your own look over the document. This is a relatively sizable estate and you want to ensure that there are no surprises and bad feelings down the road.
Seek Assistance for Estate Administration
Probate and Estate Administration can be an overwhelming process. An executor has a lot of responsibilities to complete, and delays are almost always to be expected. Seeking assistance from an experienced estate administration attorney, such as those at the Farr Law Firm, is highly recommended.
Hope this helps!
Oakley
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