The woman who made a little white Maltese the richest lapdog in the world ($12 MM, later $2 MM) is back in the news, or rather her multi-billion dollar estate is. The estate of Leona Helmsley, the Queen of Mean, has been charged a $100 million fee by its executors. According to court papers filed by the New York Attorney General’s office in January -- a mind-boggling fee of $6,437 an hour or $250,000 per month was claimed by each of the four executors. One of the executors, a former paramedic, is said to have charged $1 million just for sending emails over a 10-month period.
While we wait with bated breath for the court’s ruling, let’s take a look at our more modest lives to understand what a fiduciary (also known as an executor, personal representative or trustee) does and how compensation should be determined.
Fiduciary responsibility is given to someone who is trustworthy, organized and fair. Much will be asked of this person – it’s not for the faint of heart, especially when it comes to handling family issues as well as financial ones. After a loved one’s death, the fiduciary will see to it that assets are gathered, business affairs settled, debts paid, necessary tax returns filed, and assets distributed as the deceased directed. It is a lengthy, time-consuming and often difficult process. It also exposes the fiduciary to personal liability should there be any errors or mismanagement of the trust or estate.
If you serve as an estate executor, here are a few things not to do from the Wall Street Journal:
Some wills or trusts will include a compensation fee amount. If not, many states either provide a fixed schedule of fees or allow "reasonable" compensation, which usually takes into account the size of the estate, the complexity involved, and the time spent by the fiduciary. With Helmsley’s will, the fee wasn’t clear.
Settling an estate is a job – being paid establishes your fiduciary’s authority.