Because of the job personal presentative is often fulfilled by the decedent’s spouse, child, or other close relative, many assume that the job is a volunteer position. That is not the case. Under Rhode Island law, personal representatives, also referred to as executors or administrators, are entitled to received “just compensation” as determined by the Probate Court. RI Gen L § 33-14-8. While some states provide a formula for figuring out compensation, Rhode Island does not. It is up to the Probate Court to decide whether a fee request should be approved.
While the statute gives a Probate Court discretion over the amount of compensation approved, testators often provide for personal representative compensation in their will. The will may provide that the fee is to be a percentage of the value of the estate’s probate assets. Or it may provide for another way of calculating the fee.
The personal representative is not required to accept the fee provide in the will. They can reject it and opt for the a “just” fee as provided by the statute. The personal representative my choose to this if they feel that they would receive a higher fee by rejecting the what the will provides.
If the personal representative chooses to reject the compensation provisions in the will, if the will does not provide for compensation, or if the decedent did not leave a will, then the Rhode Island statute states that the personal representative is to receive just compensation as determined by the Probate Court. This is very vague.
It does not mean that the court will simply review the record and figure out how much the personal representative should get paid. It means that the personal representative must come up with a fee that it feels is just and petition the court to approve it. If the court feels it is reasonable, it will approve it. Generally, a fee is rejected or questioned only if someone such as a beneficiary objects to it. The personal representative would then have to provide support that their fee requests is reasonable.
The general activities that all personal representatives must complete include corralling estate assets and inventorying them, notifying creditors and paying valid debts and expenses, and distributing assets to beneficiaries and heirs. Extraordinary activities that might justify a higher fee include:
- Customary. The court will look at what is customary for a similar estate in the same geographic area.
- Size of the estate. The court will take into consideration the size of the estate. Large estates typically take more work and more time than smaller estates.
- Probate disputes. And litigation that develops during the process will likely result in a delay in the process and add to the work of the personal representative. Common types of probate disputes that lead to litigation include will contests and contested creditor claims.
- Tax issues. Disputes about taxes, delinquent property taxes, and other complicated tax issues can require out-of-the ordinary work for the personal representative.
It is up to the personal representative to keep detailed records, including time spent on various aspects of the case to support the fee requested. If it is determined that a personal representative did not properly fulfill their duties, spent less time and put in less effort than required, then their fee will reflect that.
Note that while a personal representative is entitled to compensation, they do are not required to accept compensation. They can reject what is offered in the will and choose not to petition the court for just compensation. One reason that a personal representative might choose to reject compensation is that they want to avoid any tax consequences of receiving compensation for their work. Such compensation is considered personal income and is taxable. Another reason is that emotionally they may feel uncomfortable accepting compensation for managing the estate of a loved one.