Executor Fees For Administering An Estate Ruled Not Excessive

In the estate litigation and estate administration case of Estate of Peters, PICS Case No. 15-0981 (Pa. Super., June 17, 2015), the Honorable Mary Jane Bowes, writing on behalf of the Pennsylvania Superior Court, ruled that the fees charged by co-executrices, were not excessive, where the orphans’ court found that the executrices performed extensive work in accounting and liquidating decedent’s extensive estate which included many unique assets. The order of the trial court was affirmed. Executor Fees For Administering An Estate Ruled Not Excessive.

The commonwealth, on behalf of the charitable beneficiaries of the estate of Arthur M. Peters, appealed the order of the orphans’ court that approved the first and final accounting of the estate, particularly, the amount of fees charged by the executrices of the estate. Mr. Peters, the decedent, died testate with no surviving spouse and no children, having amassed a fortune in excess of $8 million. The beneficiaries of decedent’s will included various local charities. The will also instructed that Wendy Tripoli, Esq., be hired as the estate’s attorney, to be compensated at a rate of 1 percent of the estate value, and named Linda Weaver and Holly Greenly, longtime employees of decedent, as co-executrices.

The charitable beneficiaries of the estate objected to the fees charged by the executrices. Although the executrices did not keep a log of the hours worked on the estate, the orphans’ court conducted a hearing in which the executrixes outlined the extensive duties they performed on behalf of the estate; based on this evidence, the orphans’ court denied the exceptions and confirmed the first and final account.

On appeal, the commonwealth argued that the orphans’ court erred in confirming the fees charged by the executrices, where (1) contemporaneous time records were not kept, and (2) the executrices charged for legal work where the estate’s attorney was being separately paid to perform legal work.

The court noted that the orphans’ court could permit compensation to an executor or personal representative, where the circumstances established that such compensation was reasonable and just. The court further noted that, although an executrix bore the burden of proof of establishing that her fees were reasonable, she was not required to keep a log of hours worked on an estate, and that compensation could be calculated based on a graduated percentage of the value of the estate.

The court found that the executrices had satisfied their burden of proving that their fees were reasonable and that they performed services to the estate related to the fees charged. The court noted that the executrices performed many of the duties normally undertaken by family as well as most of the legal work of the estate and, as decedent’s long-time employees, were familiar with the nature of the assets of decedent’s estate and were experienced in administering estates.

The court rejected the commonwealth’s assertion that the orphans’ court approved the fees based on the executrices’ close relationship, or that it wrote a fee structure into the will. It also discounted the commonwealth’s argument that the orphans’ court improperly relied on the legal work performed by the executrixes when the estate was already compensating an attorney, finding that the fee provided for was low compared to an estate of this size.

The court ruled that, in light of the evidence of the duties performed by the executrices, the orphans’ court did not commit an abuse of discretion in affirming the fees charged by the executrices, and affirmed the findings of the orphans’ court.

Reference: Pennsylvania Law Weekly, Digest of Recent Opinions, 38 PLW 609 (June 30, 2015)

Filed Under: Estate Administration; Executor Fees; Excessiveness

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