Managing an estate after experiencing a loss is no small task. It involves sacrificing personal time, steadfast dedication and a solid grasp of legal procedures. If you are planning your estate, you might be considering compensating the person responsible for carrying out your final wishes.
How are personal representatives compensated?
An executor’s job is extensive, from making an inventory of assets to settling with creditors and managing beneficiaries. The larger your estate, the more they have to handle. While it is an honor to be named an executor, it is also a considerable responsibility.
By compensating your executor, you acknowledge the substantial efforts they will put into your estate. There are two main ways an executor can receive compensation:
Based on what the testator believes is fair
You can specify the payment for the executor in your will or draft a separate agreement if you have an alternative form of compensation.
Based on state law
If you don’t specify a payment amount in your will, Georgia law provides a formula for payment:
- A 2.5% commission on all the money received on account of the estate
- A 2.5% commission on all the money disbursed for debts, legacies or distributive shares
- A 10% commission on any interest they earn during administration
- Reasonable compensation for the delivery of property in kind, capped at 3% of the asset’s appraised value
On the other hand, if your will explicitly states that the executor should not receive any payment, they will not be compensated.
The value of a well-written will
A will that has carefully drafted provisions can help manage expectations, potentially preventing conflict amongst your loved ones. An estate planning attorney can be your guide in this process. They can help you draft a will that’s not only compliant with Georgia laws but also accurately reflects your intentions.