As an estate and probate attorney in Summerville, South Carolina, I tell my clients that being an executor does not have to cost you anything, and in fact, you can often get paid for your services. This blog discusses whether an executor of a will or estate can get reimbursed costs, whether they can get compensated, and how the probate court calculates the compensation and fees.
Can an Executor Get Reimbursed Costs in South Carolina?
In South Carolina, an executor is entitled to reimbursement from the estate proceeds for legitimate and reasonable estate administration costs, such as death certificate copies, notarization of documents, licensing fee, and even travel costs that are strictly associated with managing the estate. Once you have an estate banking account established, you can often be paid directly for these costs, so that no reimbursement is necessary, but you should keep records in case you later have to justify your expenditures to the IRS or to estate heirs.
Can an Executor Get Compensated in South Carolina?
In South Carolina, an executor is also generally entitled to compensation also knows as an executor fee from the estate proceeds for services, although some executors choose not to exercise this right. If the will specifies executor compensation, those specified terms generally prevail. If there is no will or the will is silent or unspecific on the matter of executor compensation, then state-specific rules come into play (see below).
You may wish to discuss your compensation with the other heirs early during the process, so they don’t end up surprised and unhappy when notice their shares are somewhat less than expected. You may also want to leave the door open to modify your planned compensation as the process unfolds and you determine how much or how little work will actually be required on your part.
Generally, any such executor compensation is paid during the final stages of estate distribution, as one of the last things the executor does. Be careful not to pay yourself while leaving debts unpaid, as this may expose you to legal issues. Of course, such compensation is usually taxable.
How is an Executor’s Compensation Calculated in South Carolina?
The permissible compensation amount or fee for an executor varies from state to state and is sometimes based on a percentage of the overall estate value. The definition of “estate value” varies widely as does the cost of professional help hired by the executor. Also, when calculating fees based on estate value, in some states an executor may also be entitled to an additional fee for services above and beyond the ordinary such as overseeing the sale of the decedent’s real estate, conducting litigation, or managing the decedent’s business.
Alternatively, fees may simply take into account the nature of the work involved, the effort involved, the professional background of the executor, and the results and benefits of that work for the heirs. In such cases, it is important to keep records of the time you spent on estate business. Keep these records as you perform the activities as neglecting to do so could easily result in your compensation claims being denied by the court.
Contact the Watts Law Firm to discuss the ways in which I can help establish executorship and further explain compensation and fees. I am ready to help.