Legal Question in Wills and Trusts in Pennsylvania

20 Pa.C.S. � 3537 governs the compensation of a personal representative of an estate and provides as follows:

"The court shall allow such compensation to the personal representative as shall in the circumstances be reasonable and just, and may calculate such compensation on a graduated percentage."

In Wallis Estate, 421 Pa. 104, 218 A.2d 732 (1966), the Pennsylvania Supreme Court approved a general rule that an executor's fees of 3% of the estate under administration was "prima facie fair and reasonable." However, the Supreme Court later pointed out that 3% is merely a "rule of thumb." The real test is determining what the services are actually worth. So, where the evidence shows that the services are actually worth more or less, then the percentage should be adjusted accordingly - up or down from the 3%.

The Pennsylvania Supreme Court has also held that compensation of executors is a matter "peculiarly within the discretion of the Orphans' Court, and that the determination of compensation will not be disturbed by an appellate court unless the discretion is clearly abused." Strickler Estate, 354 Pa. 276, 277, 47 A.2d 134, 135 (1946).

I agree with Ms. Tillis - executor compensation can vary based on the size and complexity of the estate.

Johnson Estate

Determining executor commissions and attorney fees based upon the size of the estate is certainly simpler than considering a large number of factors in each case, particularly for relatively routine estate administrations and for estates in which no objections are raised to the commissions and fees claimed. The percentage method therefore appeals to judges of the Orphans' Court, even though the Pennsylvania Superior Court has criticized the practice in opinions in Sonovick Estate, 373 Pa. Super 396 (1988), and Preston Estate, 560 A.2d 160 (1989).

One judge in Pennsylvania has published an opinion to which the judge attached a schedule of the percentages that the judge used for his own guidance in auditing the accounts of estates, and several other judges have since written opinions indicating that they use this schedule as well. So, while this schedule (reproduced below) represents at best the opinion of a few judges in a few estates, it still provide some guidance in determining the reasonableness of administration costs in other estates.

See Exhibit A Johnson Estate, 4 Fid.Rep.2d 6, 8 (O.C. Del. Co. 1983).

You can look at the chart at this link: http://evans-legal.com/dan/estfees.html