As an executor of an estate, it is your job to step in and manage the administration of all pertinent issues to close out that estate. This includes everything from gathering all assets and placing them in an inventory, notifying creditors about the opening of the estate, filing estate tax returns and accounting reports associated with the estate, and handling communication with beneficiaries. Furthermore, once all of these other tasks have been handled, it is the responsibility of the estate executor to distribute any remaining assets to those heirs. AR Code § 28-48-101 et seq. details the duties and responsibilities of the executor. In Arkansas the estate executor is referred to as a personal representative. As an Arkansas executor fees lawyer can tell you, there are many times when a personal representative can become overwhelmed with the tasks or the complexity of a loved one’s estate.
Arkansas Executor Fees
Executors are entitled to receive compensation for the efforts they make on behalf of the estates. AR Code § 28-48-108. Executors have a level of personal responsibility and a fiduciary duty to beneficiaries, which means their work must be exacting and detail oriented. This means sometimes they will need to turn to outside help, such as an experienced executor fees attorney in Arkansas, to support them throughout this process. Many of them also invest significant amounts of time. An executor or personal representative serving in this role has the opportunity to waive their fees if they choose to do so. In some cases in which the personal representative is also a substantial beneficiary of the estate, they may choose to take this step proactively. However, executors are entitled to receive compensation and are perfectly eligible to request it from the estate assets. However, this must be done in line with the actual work done and to meet Arkansas laws. As an executor fees lawyer in Arkansas can inform you, there are specific percentages based on the personal property inside the estate that the executor will use to calculate their fees.
- 10% on the first $1000 inside the estate.
- 5% on the next $4000.
- 3% on the remainder.
Assets that pass directly to beneficiaries like a 401(k) retirement policy or a life insurance policy do not get included in these calculations. In many cases real estate can represent a large portion of the estate and the above listed schedule does not explicitly include real estate. Furthermore, an executor can be entitled to additional compensation if they perform substantial services in relation to selling real estate.
In many of these cases, the court will also approve the executor’s request for additional payment in these circumstances when they can show that they have had to go above and beyond in providing additional support. The executor can decide compensation according to the rules above but the court has the eligibility per Arkansas Probate Code 28-48-108 to evaluate the reasonableness of any fees paid out to an executor.
One way in which this comes up most frequently is that a beneficiary of the estate will argue that the executor is requesting unreasonable fees. Given that Arkansas has very clear rules on what is determined to be reasonable and the typical type of work that can be completed by an executor, it’s important to have legal representation as the personal representative of any Arkansas estate when a beneficiary is alleging this. Being the personal representative of an Arkansas estate is a big task and it is one that can take a lot of time.
Because you are entitled to compensation, it is up to you about whether to accept it but keep detailed records about all of the work that you have done and the decisions that you have made so that these can be easily located by other people if someone does allege that you have charged unreasonable fees.