When someone passes away, under the supervision of the Probate Court, which in New Hampshire is the Probate Division of the Circuit Court, the personal representative (also known as the executor) is the person responsible for managing the estate administration process. For the length of the estate administration process, the activities of the personal representative can be considered a “job” for which by law the person is entitled to receive “reasonable compensation.”
The personal representative is responsible for performing the tasks necessary to settle the decedent’s estate. “Settling” means caring for any outstanding business such as paying debt and distributing property.
- Inventory estate assets. One of the first tasks that the personal representative must take care of is figuring out what assets are part of the decedent’s estate. They must inventory them and give a copy of the inventory to the court. The inventory must include a list of each item, a description, its value, and any encumbrances. RSA §554:1
- Pay estate debts. Most people leave behind some debt. Generally, the debt is not forgiven upon death. One of the main objectives of the estate administration process is to make sure that all the decedent’s debts are paid. Debts may include credit card bills, loans, and taxes that were outstanding when they died. It also refers to their funeral and burial expenses as well as expenses related to estate administration.
- Distribute estate assets. The personal representative is also responsible for asset distribution. Assets must be distributing in a very specific way. The personal representative must distribute assets as directed in the decedent’s will or as directed by New Hampshire’s rules of intestate succession. Further they cannot be distributed until debts and expenses are paid and the court approves distribution. If there are no assets in the estate after debt and expenses are paid, then beneficiaries and heirs will receive nothing.
Personal Representative Compensation
Under New Hampshire law, personal representatives are entitled to reasonable fees for their work in settling a decedent’s estate. While many states provide a compensation structure based on the value of the assets under administration, New Hampshire has not. The law requires only that the fee is reasonable.
Thus, the personal representative can request a flat fee, or a fee based on the percentage of assets under administration. In determining if a fee is reasonable, the court will look at the “nature of the assets” under administration. This means that the court will consider:
- Nature of the work involved. The court will look at the time the personal representative spent on administration activities, the amount of effort those activities required, and the skill required to perform those activities.
- Compensation customarily charged. The court will consider the fee charged for similar work for similar estates in the general geographic area.
- Size of the estate. The will consider the size of the estate. Generally, an estate with fewer assets requires less time and less effort than an estate with significant assets.
- Experience and capabilities of the person. The court will consider the experience and expertise of the personal representative.
To justify fee requests, personal representatives typically keep detailed records. A fee cannot be paid to the personal representative without court approval.