Executor Compensation and Fees (CO)

In Colorado, the estate executor is known as a "personal representative", or more generally, a "fiduciary".

In determining executor fees, the state of Colorado uses the commonly accepted principle of "reasonable" compensation. However, while some states say "reasonable" and leave it at that, Colorado statute goes out of its way to say that no approach should be determined unreasonable out of hand, and specifies a detailed, long list of factors that, if the court gets involved, must all be considered. Highlights include:

• Nature of the work involved (time, effort, difficulty, skills required)
• Compensation customarily charged (in the community for similar services)
• Nature and size of the estate (and the results and benefits obtained by the executor)
• Any litigation and results
• Any time limitations
• Adequacy of any relevant billing records

You don't personally need to consider all these factors: you just need to come up with an approach that's reasonable. For example, to keep things simple, you might set your fee to $10K (or $40K!), you might set it to 4% of the gross value of the estate, or you might tie it to the hours you put into settling the estate. It just needs to be reasonable for the circumstances of the particular estate. If you do end up in court, however, all of the above factors (and more) will be considered by the judge, and so regardless of the compensation approach you attempt to take, it would be wise to keep a detailed record of your activities in case you later need it:

• Nature of the task (e.g., Drove to bank to get medallion stamp for IBM stock)
• Amount of time spent (e.g., 2 hours)
• Hourly rate for the task (e.g., $35/hour)
• Results (e.g., sold the car for Blue Book value)

To make all this a little more concrete, you can see that according to the calculator below, a CO estate worth $500K that required 650 hours of effort might generate $19K in executor fees.

If the will specifies a specific compensation, and you do not have a contract in place to serve as executor, you may renounce the compensation specified in the will if you do so before officially being appointed executor, and hence be entitled to reasonable compensation as described above.

You do not need a court order to pay yourself this reasonable compensation, but it's a good idea to notify the heirs of your decision in advance and to try to minimize any issues.

See Colorado Revised Statutes §15-10-603 for all details.

EstateExec provides the following executor compensation estimator for CO estates, but please keep in mind that there are no hard and fast rules for CO estates, and ultimately you must determine what would be reasonable for your particular circumstances. By using this estimator, you acknowledge that EstateExec provides any results as informational input only, not as legal advice, and cannot be held responsible for any inaccuracies for, or misunderstandings about, any given estate.

Below EstateExec provides two compensation approaches used in various incarnations throughout the United States: you can decide which, if either, is appropriate for you. The first uses a sliding percentage scale based on the total estate gross value (the larger the estate, the smaller the percentage); the second simply compensates the executor for the value of his or her time, and is probably the more common approach in CO. See estimation methodology for details.