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Is an executor entitled to compensation in Colorado?

On Behalf of | Feb 13, 2023 | Estate Planning |

Naming an executor is an important aspect of estate planning, as this person handles the terms of a will. While an honor, there are many reasons why someone might want to avoid the responsibility.

Often, an executor is a family member or loved one. Such people may be willing to shoulder the duty without compensation. In Colorado, though, state law requires that this individual receive payment.

What factors determine executor compensation in Colorado?

The Centennial State demands that executor earnings be “reasonable.” Such a definition leaves plenty of wiggle room for arriving at a specific dollar figure. The qualifications for reasonableness remain open to interpretation.

Various considerations may come into play when calculating this fee, including:

  • Necessary tasks
  • Requisite time
  • Estate size
  • Litigation involvement

Thoroughly exploring all these components is unnecessary. The only imperative is taking a fair approach.

How does one determine executor compensation in Colorado?

Individuals have an array of approaches for deciding executor payment. One method simply looks at how long the process takes from start to finish. All the person does is tally the number of hours and apply an hourly rate. Another approach is carving out a percentage of the gross value of the estate. Choosing a method can be agonizing.

Whatever the decision, formalizing compensation details remains wise. In the absence of a contract, a judge may be necessary to reach a resolution.

When crafting an estate plan, eliminating unnecessary obstacles should be a primary aim. Devoting forethought to executor compensation is one step toward achieving this goal.