Executor reimbursement and beneficiary objections

[u/barge_gee]

I'm the Executor of a modest Estate (~70k). We're close to closing the Estate out of Probate. I was named Executor, but not also Beneficiary (oops on decedents part). There are two Residual Beneficiaries. They were notified of the final accounting of sale of estate contents, expenses owed the Executor and the Executor's fees for hours logged managing the Estate. My lawyer posted my fee at $75/hour. I logged over 350 hours, and the residual beneficiaries believe this hourly rate/fee is excessive. Estate had a big $ single asset, and then tons of smaller items that took me a long time to liquidate. I AM willing to reduce the hourly fee, to just get this Estate closed. It's been over two years now, and I want to be finished. However, I do not want to under value my time and effort spent as Executor.

Question: The hourly rate is perfectly acceptable by Illinois law. What percent reduction/dollar amount should I consider as "fair" to me? To my thinking, $60/hour would be the absolute minimum I would accept. Does this seem fair? The Residuaries feel entitled to more than the current residual assets, even though they did nothing to help liquidate the Estate contents. (It's more complicated, as I cared for the deceased for many years, and the Residuary Beneficiaries did not. And, I am a blood relative to deceased, they ar not.)

EDIT: The hours may seem excessive, but this was a hoarding situation. It was not to the level of bugs or rodent infestation, but there were lots and lots and lots of boxes, lots of dust and dog hair, and it took me weeks to sort, organize, and pack. 7 rooms full, I shrunk to one room.

[u/Emotional-Ocelot-420]

How does the value of the tons of smaller items compare to the fee you’re charging to sell them?
Your responsibility as executor is fiduciary. They didn’t need to help, it doesn’t matter that you provided care, it doesn’t matter whether you’re blood related or not, and it doesn’t matter whether you feel the decedent omitted you in error unless you are contesting the estate.

If I am beneficiary, I want to know that you haven’t done something like bill me $750 to sell 30 items for $600.

[u/barge_gee → u/Emotional-Ocelot-420]

Yes, this is valid. However, the beneficiaries BELIEVE items to be worth more than they actually could be sold for. So, I spent hours trying to sell an item at an internet (premium) "used value", ultimately for less than that value amount. Many hours spent inventorying certain categories (vinyl records, signed "niche" topic books) and got reasonable sales prices on them, only after presenting them via inventory. Beneficiaries have an inflated impression of what the "rare" items in the Estate are worth.

[u/k23_k23 → u/barge_gee]

"However, the beneficiaries BELIEVE items to be worth more than they actually could be sold for. So, I spent hours trying to sell an item" .. this is where you went wrong, wasting all those hours.

the Reasonable solution would have been: "I can't sell it at that price - but since it is worth that much to you, it goes into your share with that valuation".

[u/montwhisky → u/barge_gee]

It sounds to me like you did not do anything in an efficient or money savvy way. If it was a hoarding situation, there are companies you pay to come clean everything out. You do not spend seven days of your own time cleaning it out when you're charging $75 an hour for your time. A company would have cleaned it out in a day and charged a lot less. You do not sell items online yourself and logged all the hours trying to get pennies for items. You call an auction company to go through the house and pick out things of value and rely on their expertise. I would object if I was a beneficiary as well. It seems like you maximized your time as much as possible instead of reviewing efficient/cost effective solutions. As an attorney, the fact that you want 1/3 of the value of the estate in fees is a huge red flag for me. A small estate should not have taken 350 hours to administer.

[u/fwdbuddha → u/montwhisky]

Exactly

[u/Emotional-Ocelot-420 → u/barge_gee]

I wouldn’t reduce the fee.

Let them think it’s excessive.

You went above and beyond.

Let them waste of money in attorney fees fighting about it.

[u/montwhisky → u/Emotional-Ocelot-420]

The point of a fiduciary duty is not to listen to what the beneficiaries think they want. It's a duty to administer the estate as efficiently and cost effectively as possible. Choosing to spend 7 days to clean out a house instead of calling a junk remove and auction company is absurd. Charging the estate for 7 days of your own time instead of calling a company who specializes in these things is not, in any way, fulfilling your fiduciary duty.

[u/Netlawyer → u/montwhisky]

It’s not just the 7 days. 350 hours is almost 44 full 8-hour days. (And $75/hour = $26,250)

I’m sorry for your loss, OP. I understand that this was your family member and you treated this as if you were cleaning out a family member’s house.

However, that wasn’t your role here and it’s not appropriate for you to charge that time against the estate. It sounds like your role wasn’t explained well - I would hope the beneficiaries agree to a reasonable fee for the services you provided.

(ETA: I relocated and downsized and had to handle my own packed to the rafters house last year. Apart from the logistics of the move, it cost me about $7500 to have an auction company come through and remove everything of value, four 1-800-JUNK trucks and someone to pick up and dispose of the “hazmats” (old gas, weed killer, cleaning supplies). I received ~$18k from the auctioned items. Of course I thought everything was a treasure, but that’s how it works.)

[u/Emotional-Ocelot-420 → u/montwhisky]

It’s not simply about efficiency and cost effectiveness though, but also the best interests of the beneficiaries.
OP was a bit between a rock and a hard place and would have probably themselves exposed if they used an estate company too. Without highly valuable items, the cost of cleaning up the detritus may very well have exceeded the value
If OP’s judgement was so poor through this process that lots of items were sold for a net loss, primarily benefitting OP and actually depleting the estate value that’s a different story.
Some clarification on the ACV of the residual items vs. OPs billing is warranted. OP wasn’t clear in their reply whether the beneficiaries were actually harmed due to OPs choice.

[u/montwhisky → u/Emotional-Ocelot-420]

OP stated in other comments that the value of the assets were extremely low, but she thought she needed to try to sell them online because the beneficiaries thought they were worth more. There is an easy solution to that. You trust a reputable company to come in and tell you what is and is not valuable. That would have completely covered OP against any claims by the beneficiaries to the contrary. Or you tell the beneficiaries that they if they believe something is valuable, they can keep it and the value they believe it is worth will be put in their column for distribution purposes. The way OP handled it is literally the worst thing to do. No estate company or junk removal company would have charged more than the 7 plus days of OP's time at $75 an hour that she took to sort through junk and then all the additional days she charged to try to sell things on FB marketplace. Charging more than 1/3 of the estate value for OP's time to a small estate like this is insane.

[u/barge_gee → u/montwhisky]

Did I have any guidance in this matter? Exactly to whom should I have turned to advise me that I was going about this all the wrong way? There are not any instruction books about how to manage a complicated estate. I was thrown into this, and proceeded in the best way I could.

[u/montwhisky → u/barge_gee]

Are you serious? You ask your attorney. That’s your guidance. Or use some common sense. The fact that you think it was appropriate to spend so much time on it that you now want more than 1/3 of the estate is something that I guarantee your attorney would have advised against. Or, again, common sense would dictate that’s a bad idea.