Anyone that has been appointed estate representative is entitled to compensation for services. This compensation is called “commissions” which are paid out of the estate assets. The personal representative may request or waive the commissions on the Petition for Final Distribution. The gross value of the probate estate determines the amount of commission the personal representative may receive. As a side note, this commission is the same fee as the statutory fees an attorney would charge for their services.
4% of the first$100,000 3% of the next$100,000 2% of the next$800,000 1% of the next$9,000,000 ½% of the next$15,000,000 “reasonable amount” for everything above$25,000,000
If the personal representative is the sole beneficiary, it is common for commissions to be waived since the personal representative will receive all of the estate anyway. However, if there are several beneficiaries and a personal representative has spent countless hours administering an estate, it is important for the personal representative to discuss this issue with the other beneficiaries if they intend to claim commissions. If a personal representative receives commissions, the tax law treats them as taxable income, and the representative must report them on their personal income tax return.
In our cases, the majority of personal representatives waive the statutory commissions. In cases where there will not be a waiver of commissions by the personal representative, additional fees will be due to cover the extra paperwork required.