Executors & Administrators
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The executor or
administrator has the task of locating the decedent's
assets, filing the necessary tax returns, paying any
taxes due, paying the debts, general costs and
administration expenses, and distributing the assets to
the beneficiaries. In New Jersey, the difference between
an executor and an administrator is how they come to
undertake the responsibility. An executor is appointed
under the terms of the last will and testament. An
administrator is appointed by the surrogate or by the
Court when the decedent does not leave a last will and
testament, or did not appoint an executor who is able
and willing to serve. |
Personal
Representative or Attorney For The Estate?
In
New Jersey and many other states, both an executor and an
administrator can also be referred to as a personal representative. The personal
representative is entitled to retain an attorney to assist with
his or her responsibilities. The personal representative is
entitled to pay the attorney a reasonable fee from the assets of
the estate as an administration expense. Although such an
attorney is commonly referred to as the attorney
for the estate, there is a danger with the use
of this term. The attorney for the personal representative has a
professional duty to the personal representative, and not to the
beneficiaries. There may be some situations in which the
attorney represents both the personal representative and the
beneficiaries, but this situation may be the cause of ethical
difficulties for the attorney.
Estate vs. Beneficiaries - Conflicts
There always exists the possibility that the beneficiaries will
claim that the personal representative has acted improperly,
either by willful conduct or by negligence. In this case, an
attorney who is also representing the beneficiaries will have
the professional obligation to inform the beneficiaries of any
information regarding the acts of the personal representative,
and to advise the beneficiaries as to their legal recourses
against the personal representative. The attorney will likely
find it necessary to withdraw from representing any party in
such a situation because of the inherent conflicts. The attorney
selected by the personal representative to assist in the
administration of the estate is often the same lawyer who
prepared the last will and testament, or who represented the
decedent during his or her lifetime. The personal representative
is by no means required to do this, however.
Attorney For
The Estate
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The
"attorney for the estate" is actually the lawyer
for the personal representative. Since a person
always has the right to select their own
attorney, a personal representative is not
required to retain any particular attorney, even
if the last will and testament specifically
directs the appointment of a particular attorney
or law firm. The personal representative is
entitled to receive compensation for the
services provided. Unless the last will and
testament directs otherwise, the personal
representative receives "commissions", which are
computed as a percentage of both the principal
assets of the estate, and a percentage of the
income. |
Fees and Commissions
In New
Jersey, the principal commissions are:
The
principal commissions are only computed on the
assets passing under the will or as part of the
intestate estate, not on assets passing outside
the estate, such as life insurance or retirement
plans which pass according to a beneficiary
designation. The income commissions are 6
percent of all income received during the estate
administration. If there is more than one
personal representative, or if there are unusual
tasks which the personal representative carries
out, the Court may increase the total
commissions. The fee payable to the attorney for
the estate can be computed as a flat fee for the
entire administration, as a percentage of the
assets, or on an hourly basis.
The beneficiaries have the right to review and
challenge all of the administration expenses of
the estate, including the attorney's fees. If
the amount of the attorney's fee is contested by
the beneficiaries, the Court may allow only a
certain amount to be paid out of estate assets.
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