Does the Personal Representative of an Arizona Estate Receive Compensation?
The court-appointed personal representative of an Arizona estate has substantial legal and fiduciary duties under state law for administering and settling a decedent’s estate. The laws provide that an individual who serves in that position may receive payment for the work performed, but there are limitations on the amount of compensation a personal representative may receive.
Duties of a Personal Representative
When an Arizona resident passes away, court appointment of a personal representative for the estate is often necessary. Arizona laws establish a priority order for the appointment. The personal representative may be an executor named in a last will and testament, or it may be someone else.
Regardless of who serves as the personal representative, that person has significant responsibilities under Arizona law. Many times, the personal representative retains a probate attorney to help with administration of the estate. But even when a lawyer helps, the law imposes specific duties on the personal representative. Failure to perform the required tasks may result in legal liability.
After determining whether probate is necessary and what type of probate is appropriate, which is usually accomplished with an attorney’s assistance, the personal representative undertakes a wide range of tasks relating to the estate. The extent of the work depends largely on the nature and complexity of the decedent’s assets, property, and financial obligations, in addition to the contents of relevant legal documents, including the deceased person’s estate plan.
The probate process has specific filings and steps that must be followed in administration of an estate, some of which have time limitations. Initially, the personal representative collects and inventories all the property in the estate. Sometimes, professional appraisals are necessary. Then, all outstanding expenses and financial obligations are settled. Ultimately, as the probate process nears completion, remaining assets are distributed to the beneficiaries or heirs. The amount of time it takes to complete the process depends on a number of factors.
Personal Representative Compensation
As should be apparent from the preceding explanation, serving as a personal representative sometimes requires a lot of time and effort. Even so, if the individual who serves as the personal representative is a family member or close friend, they may not wish to receive compensation and may serve without charging. But Arizona laws do allow a personal representative to receive compensation for the work related to settling an estate.
Applicable Statutes and Court Rules
A specific section of Arizona law, A.R.S. §14-3719, allows a personal representative to receive “reasonable” compensation for the services provided. The section further provides:
If a will provides for compensation of the personal representative and there is no contract with the decedent regarding compensation, he may renounce the provision before qualifying and be entitled to reasonable compensation. A personal representative also may renounce his right to all or any part of the compensation. A written renunciation of fee may be filed with the court.
Rule 33(F) of the Arizona Rules of Probate Procedure also applies to personal representative compensation. Some local courts have additional guidelines that are applicable.
Reasonableness of Compensation and Court Review
In estates where the personal representative does receive compensation, the determination of what is reasonable involves consideration of a number of factors. The amount of reasonable compensation is affected by the size of the estate, nature of the assets and work involved, customary or court-prescribed personal representative compensation in the locality, and the skills and abilities of the person serving.
Depending on the location and circumstances, personal representative fees may be calculated on an hourly basis, taking other specific considerations into account as well. The personal representative’s compensation is paid out of the assets of the estate, as are the fees for a probate attorney to assist with estate administration. If the estate does not have sufficient assets to pay all the decedent’s obligations, payment of the personal representative’s compensation takes priority over other claims against the estate.
The court that supervises administration of an estate has authority to review and approve the personal representative’s compensation, so reasonableness is not arbitrary. However, under Arizona Rule 33(F), a personal representative is not required to request approval unless the court orders otherwise. Even if the court does not review the amount of compensation, ascertaining appropriate compensation is one of many reasons for the personal representative to seek assistance from a probate attorney before beginning administration of a decedent’s estate.
A personal representative who plans to receive compensation should maintain meticulous records concerning the specific work and amount of time spent on administering and settling the estate. Other expenses, such as travel, should also be documented. The personal representative should be prepared to provide detailed records in connection with the determination of the reasonableness of the requested compensation, in the event the court requests the documentation.
Serving as a Personal Representative
If you are considering serving as the personal representative for a loved one’s estate, it is important to understand the full legal responsibilities that come with acceptance of the position, as well as the terms that govern compensation. Serving as a personal representative is not a decision to make lightly. For many estates, the position involves a substantial amount of work that is difficult and time-consuming.
Talking with an experienced probate lawyer before deciding to apply for appointment is often advisable. A knowledgeable attorney can provide information to help you make an informed decision. At Peterson Law Offices, your initial consultation is free and without obligation, so there is no reason to hesitate to reach out to us.
Schedule a Free Consultation with an East Valley Probate Lawyer
At Peterson Law Offices, we assist clients with all aspects of estate administration and probate, regardless of the size and nature of an estate. Your first consultation is always free of charge. If you have questions and concerns about settling a deceased loved one’s estate, we are here to help.
We take pride in offering top-quality, affordable legal services and exceptional client service. We welcome inquiries from clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler. Schedule your free initial consultation by calling 480-878-5998 or using our online contact form.