Question: If I am an executor (or administrator, conservator, trustee, guardian or any other fiduciary in charge of assets), may I get paid for my work? And how much can I request?
Answer: Connecticut law on fiduciary fees has been steady for nearly 100 years. The best reflection of fees law is in the case of Hayward v. Plant, Volume 98 of the Connecticut Supreme Court reported decisions at Page 374 issued in 1923. Probate and Superior Court judges cite Hayward in just about every decision on fees. The basic guides in the case are clearly reflected in the latest Probate Court Rules of Procedure at Rule 39.2 – Task statement of fiduciary and attorney. When a fiduciary submits an invoice for services rendered, it should reflect nine (9) points. They are:
- Size of the estate;
- Responsibilities involved;
- Character of the work required;
- Special problems and difficulties met in doing the work;
- Results achieved;
- Knowledge, skill and judgment required;
- Manner and promptness in which the matter was handled;
- Time required; and
- Other relevant and material circumstances.
A simple way to appreciate Hayward and Rule 39.2 is to ask yourself if you have added value to the matter put in your charge. Have you added value? For example, consider the estate of a deceased uncle which consisted of 10 stocks, several of them in foreign corporations, along with a mortgage in default on a grocery store, plus miscellaneous bank accounts and other assets. You work hard to sort out all the aspects of all these assets. You collect a good amount of them into your hands as the executor of the uncle’s will. You have protected them. You may even have increased their values. You provide timely reports to the Court and, upon Court approval, you distribute them to the will’s beneficiaries. Clearly, you have added value and should be compensated for the results of your labors.
A bald and bare statement of “time required”, section 8 above, without explanation is not enough to convince a judge to approve your invoice statement. The judge must see the other eight (8) sections reflected somehow. It may not matter that you spent 100 hours on an estate if you have taken forever to process it, and lost half of it in poor decisions.
All that said, how much should you charge per hour for a job well done? Courts have approved fees of $25/hour for a modest estate even if successfully managed. On the other hand, Courts have approved the fees of laymen executors with rates as high as $150/hour for an estate over $2 million with all the above points covered.
Probate judges have told me they use a rough yardstick to measure whether a fiduciary’s invoice is fair and reasonable. If the invoices of the executor, the lawyer and the accountant total less than five (5%) percent of the gross taxable estate, then the judges will approve of them, barring objections from the estate’s beneficiary’s. For example, total fees under $5,000 for an estate of $100,000 will likely be approved. And total fees under $50,000 for an estate of $1 million will likely be approved. When the fees exceed the five (5%) percent test, judges want to see clear statements as to why. Your task statement covering the above nine (9) factors should make it clear to the judge. If the judge is not satisfied, your fee will be cut to what the judge deems fair under Hayward and Rule 39.2.
Tip: From the time you assume your duties as a fiduciary, keep clear records of what you do and how long it took you. Do your work on paper, and save all of it. Do not pay cash. Write checks. Your records will be worth gold to you at the end of the process.