AN EXECUTOR’S PAYMENT OF AN EARLY INHERITANCE TO HIMSELF BUT NOT TO OTHER BENEFICIARIES WAS APPROPRIATE

In the estate litigation case of In re Estate of DeWalf, PICS Case No. 17-0406 (C.P. Lycoming, Mar. 2, 2017), the Honorable Nancy Butts ruled that the executor’s payment of an early inheritance to himself but not to other beneficiaries was appropriate due to the amount of work the executor put into recovering and maintaining the property of the estate. However, the executor was not entitled to any additional payment in compensation for his services in administering the estate.

Decedent died on March 2, 2015. His will left the residue of his estate in equal one-fifth shares to his brother and four nieces and nephews. Pursuant to the will, decedent’s nephew, Pysher was appointed as executor of the estate.

Pysher identified the assets of the estate and met with attorneys for the estate. He maintained decedent’s real property and spent time cleaning up the property. Pysher also farmed the land after decedent’s death. Pysher gave himself a $125,000 early inheritance, but made no offers to give an early inheritance to any of the other beneficiaries.

Petitioner was a beneficiary of the estate. She objected to the first and final accounting, claiming Pysher acted improperly in paying himself.

Pysher argued that he benefited the estate because he farmed and maintained the property, and in addition, he discovered a relative had taken $36,000 of cash out from decedent’s property, which was returned to the estate. Pysher also discovered additional real property of the decedent which was unknown to the other beneficiaries.

The court noted that the rule of thumb for determining an executor’s commission was 3% of the appraised value of the corpus at the time of the transfer to the fiduciary for administration. The evidence indicated Pysher worked diligently for the upkeep of the estate. He also performed all duties expected of him as an executor. The court concluded that the commission Pysher had already paid himself was consistent with the “rule of thumb” and appropriate under the circumstances. However, Pysher was not entitled to any additional consideration, and the court held the amount already paid was to be Pysher’s final commission for his service as executor.

Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 40 PLW 297 (March 28, 2017)

Filed Under: Estate Litigation; Executor’s Commission; Early Inheritance

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