HIGH VALUE ESTATES: PROPOSAL FOR COMPENSATING PERSONAL REPRESENTATIVES AND ATTORNEYS FOR ORDINARY SERVICES IN PROBATE ESTATES THAT EXCEED $25 MILLION
By Richard S. Kinyon, Esq.,* Danielle T. Zaragoza, Esq.,* and Kirsten D. Wolff, Esq.,**
The Probate Code requires court approval for all compensation paid to the personal representative of an estate. The probate court is guided by a statutory framework that specifies compensation for "ordinary" services based on a fixed rate schedule applied to the total value of the assets of the estate up to $25 million. For an estate with assets valued in excess of $25 million, ordinary compensation with respect to the value over $25 million must be set at a reasonable level, as determined in the court’s discretion. In addition to ordinary compensation, the statute provides for compensation for specifically enumerated "extraordinary" services, which is only awardable if the compensation for "ordinary" services is insufficient to adequately compensate the personal representative for the extraordinary services provided.
The court’s role in approving and determining fees serves two purposes. First, it encourages personal representatives to act, since the personal representative will be paid for his or her services in accordance with a court’s order. Second, the hearing regarding fees gives all beneficiaries and other interested parties an opportunity to object to a request for unreasonable fees.
I. LEGAL FRAMEWORK