When managing an estate in Montana, personal representatives often ask whether they may take a commission on the original estate assets and on funds generated by asset sales. This guide explains how Montana law treats commissions, walks through the required procedures, and highlights key considerations.
Detailed Answer
Statutory Authority
- Mont. Code Ann. § 72-3-305 (Compensation of personal representative): https://leg.mt.gov/bills/mca/title_0720/chapter_0030/part_0050/section_0050/72-3-305
- Mont. Code Ann. § 72-3-307 (Extraordinary services of personal representative): https://leg.mt.gov/bills/mca/title_0720/chapter_0030/part_0050/section_0070/72-3-307
Right to Reasonable Compensation
Under Mont. Code Ann. § 72-3-305, a personal representative may receive “reasonable compensation” for ordinary services. This compensation can take the form of a commission based on the value of estate assets and sale proceeds. Montana statutes do not set a fixed percentage. Instead, the court reviews all relevant facts to determine what is fair.
Commissions on Assets vs. Sale Proceeds
• Assets at appointment: A commission may be based on the gross value of estate assets at the time letters are issued.
• Proceeds from sale: If the estate’s assets generate cash through sale, a second commission on gross sale proceeds may apply. The personal representative must account separately for each commission.
Procedure to Seek a Commission
- File an Application with the Court: The personal representative submits a petition detailing services rendered, assets administered, sale transactions, and the requested commission amount. (Mont. Code Ann. § 72-3-305).
- Provide Notice: Serve all interested persons, including beneficiaries and heirs, with notice of the fee petition and a deadline to object.
- Court Hearing or Written Objection: If no one objects within the prescribed time, the court may allow the requested commission. Otherwise, the court will hold a hearing to resolve disputes.
- Order and Payment: Once approved, the court issues an order authorizing payment from estate funds.
Factors the Court Considers
- Size and nature of the estate’s assets.
- Time spent and tasks performed by the representative.
- Complexity of asset sales and investment management.
- Benefit to the estate and its beneficiaries.
- Customary fees in similar Montana estates.
Extraordinary Services
Services beyond routine administration—such as litigation, tax‐saving strategies, or property partitioning—may warrant additional fees under Mont. Code Ann. § 72-3-307. The representative must describe these services and provide time records.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.
Helpful Hints
- Keep detailed time logs and records of every task you perform as personal representative.
- Track gross asset values at appointment separately from sale‐proceeds calculations.
- Provide transparent accountings to beneficiaries to minimize objections.
- Review local court rules for filing and notice requirements in your county.
- Consider informal agreements with beneficiaries to streamline fee approval.