Under Maryland state law, executors/personal representatives are entitled to payment for their work in administering an estate. Often the wording included in a Last Will and Testament will state a flat fee, contingency fee (based on transactions or size of the estate) or simply claim an executor is entitled to ‘reasonable compensation’. Even if the will does not have a compensation clause, state law provides a formula for arriving at a reasonable fee.
Some people feel uncomfortable accepting payment because they fear other family members will think that it is greedy or unfair. Being an executor requires a considerable amount of time and effort and it is a big responsibility. Anyone who accepts the job of executor has a fiduciary duty to place the interests of the beneficiaries over his or her own. The deceased may have chosen a particular person to serve in this role because of his or her professional background or simply trustworthiness. The role requires that the executor inventory all assets and liabilities, deal with creditors, maintain property and once all debts have been settled, distribute assets to beneficiaries. It is a very time-consuming role and deserves adequate compensation.
A Notable Exception – When to Waive Executor Fees
If someone is serving as the executor and is also the sole beneficiary then it may be better to waive the executor fees because they are considered taxable income while the money that will be in inherited will not be considered taxable income.
The Maryland statutes say that the maximum executor fee is 9 percent of the estate's value if the estate is worth $20,000 or less. If the probate judge thinks the amount in the will is unreasonably low, the court can raise it. Probate judges have considerable leeway in determining the appropriateness of fees. If you need assistance in determining how to go about your role as an executor, contact the experienced probate attorneys at Stouffer Legal in the Greater Baltimore area for help.
