What can I charge to the estate as Personal Representative?

Asked about 2 years ago - New Hope, PA

Small estate, $30,000, at most. mother lived in MI, I live in PA. At present I am only reimbursing myself for tolls and gas for the 1300 mile round trip, have made 4 trips to date since April 2012. Estate is complicated by the fact that my disabled sister lived with her and must be resettled. Disabled sister was supported by my Mother and her survivors SS from my deceased Father. Sister has no personal assets to live of otherwise since Mother's death. Are the reimbursements noted income to me for tax purposes? What can I also charge, meals, etc. that is not regarded as income?

Attorney answers (4)

  1. Robert Cronin

    Contributor Level 6

    3

    Lawyers agree

    Answered . Michigan law may differ from Pennsylvania Law.

    In PA, the Court shall allow such compensation to the personal representative as shall in the circumstances be reasonable and just ... See 20 Pa.C.S. 3537. The test is what the services actually were worth. In order to determine the value of the services rendered, the courts look to the responsibility incurred and the service and labor performed. Compensation shall be fair and just based upon the extent and character of the labor and resonsibilities involved.

    Though even Courts in PA differ, the local court in my county is inclined to award 3% of the gross estate to the personal representative on a "normal estate". This fee may be increased upon the services actually renderred.

    Legal disclaimer: Please note: Robert Cronin is licensed to practice law in Pennsylvania. Nothing in this article... more
  2. Steven J. Fromm

    Contributor Level 20

    2

    Lawyers agree

    Answered . Mr Frederick offers sound advice and his comments are generally consistent with PA law. However, under the Johnson's Estate case if memory serves me correctly you are allowed up to a 7% commission on the first $100,000 of assets. This will be taxable income to you and will be subject to social security taxes to boot. The reimbursements are not taxable income to you, but food is generally not deductible for PA inheritance tax purposes.

    Hope this helps.

    Please remember to designate a best answer to your question.

    Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336, his email address is sjfpc@comcast.net , for more tax, estate and business articles visit his website www.sjfpc.com. and blog

    LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia... more
  3. Charles Anthony Rick

    Contributor Level 15

    2

    Lawyers agree

    Answered . I agree with the other responders. Expenses must be reasonable and must be explainable if asked. I would say you are fine with the tolls and gas, but I wouldn't risk calling meals an expense because you would eat regardless. You woudln't necessairly travel 4 x to Michigan over 1300 miles since April if you were not doing the Estate. Generally, if it passes the sniff test, you are okay..if not, it's not worth it to put things that are questionable...if you aren't sure, then you are better not putting it.

    If you found this answer helpful, let me know by clicking the "Mark as Helpful" button at the bottom of this... more
  4. James P. Frederick

    Contributor Level 20

    2

    Lawyers agree

    Answered . There is no percentage or figure that is required in Michigan. You are entitled to "reasonable compensation." Ideally, you have kept a time log of the time you have spent working on the estate. You are entitled to reimbursement for actual expenses, but not for things like meals that you would normally require, otherwise. Anything that you take as compensation is taxable income to you. Anything received as your inheritance is tax free.

    James Frederick

    *** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and... more

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